Hector Sants is to step down as chief executive of the Financial Services Authority this summer after three years in the job, it was confirmed this morning.
Mr Sants, who joined the City watchdog iin May 2004 as managing director of wholesale and institutional markets, said that he had always only intended to serve three years in the post.
News of his departure comes amid speculation that the Conservatives, if elected, would want Mr Sants to become a deputy governor of the Bank of England.
The Shadow Chancellor, George Osborne, has already made clear that an incoming Conservative government would abolish the FSA and hand over its regulatory responsibilities to the Bank — a pledge which FSA insiders say has made it difficult both to recruit new staff and retain existing ones.
Mr Sants has become increasingly outspoken, during the last 12 months, about practices in the financial services industry.
Last year, after criticism of the regulator’s performance during the financial crisis, he pledged to “make judgments” on senior management in the industry and take actions if, in the FSA’s view, decisions being made would lead to risks.
He added: “There is a view that people are not frightened of the FSA. I can assure you that this is a view I am determined to correct. People should be very frightened of the FSA.”
The FSA said this morning that its board would announce a process for deciding who would succeed Mr Sants — who joined the FSA from Credit Suisse First Boston, the investment bank, where he had been chief executive for Europe, Middle East and Africa — “in due course”.
Mr Sants said today: “When I was appointed I told the board that I planned to serve as chief executive for three years, and I intend to stick to that timetable. Of course, those three years have encompassed the most extraordinary circumstances for a financial regulator, and I am very proud of the manner in which the FSA rose to the challenge of dealing with such unprecedented turbulence across global financial markets.
“Moreover, I believe the FSA candidly examined the failings in financial regulation that contributed to the onset of the crisis, learned the lessons and has gone on to reform itself into a much stronger and better equipped organisation.
“The success of any regulatory structure depends on ensuring supervision is carried out by high-quality supervisors with sufficient resources and specialist support.
“I believe the FSA has made great strides in ensuring that such individuals are in place in the UK and I am sure that after I leave they will continue to do invaluable work to ensure financial stability and protect the interests of consumers.”
Adair Turner, the FSA’s chairman, added: “Hector has given outstanding service and leadership through the turbulent last three years and has played a pivotal role in reforming the FSA into a truly effective organisation. He will leave behind an organisation with strong purpose and a clear strategy. We will be immensely sorry to lose him, but understand his decision to move on in the summer and wish him well in whatever he chooses to do after his departure.
“In the meantime, we will continue to work together to deliver the FSA’s reformed and intensive supervisory approach and drive forward the global regulatory reform agenda.”
Sources: Times Online, Guardian, FSA
