James Moore: A glittering career forever tarnished by a failure to act

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The Independent Online

The word emanating from the FSA's docklands Lubyanka about Hector Sants' departure announcement yesterday was that it was a personal decision dictated by his personal timetable. He had always said he would go after three years and yesterday's announcement fits in with that. Nothing more to see here, move along now.

Well, maybe. Given the challenges still facing the FSA, one might think a man like Sants, who joined the organisation out of a sense of public duty after a glittering City career, would be amenable to staying on a few months longer at least.

But, then, with a Tory sword of Damocles hanging over the organisation and a publicity hungry New Labour luvvie chairman making the important policy announcements, maybe he'd just had enough.

Sants got people's attention when he joined the organisation to head up the wholesale markets division, by talking tough and following it through in the case of the hedge funds, which had been cocking a snook at the regulator for years. His position meant he escaped serious criticism over the FSA's (non) supervision of Northern Rock and he was therefore the obvious choice to take over at the top when John Tiner left.

But barely had he got his feet under the desk when the watchdog found itself in the middle of a financial maelstrom. Sants' career will always be characterised by the fact that he – and the rest of his organisation – failed to notice the banks were engaged in activities that were just as risky as any hedge fund, but with consequences that went far wider. Throughout the financial crisis the organisation appeared to be playing a perpetual game of catch-up.

But it's hard to entirely blame Sants for that. He is, after all, the only regulatory kingpin in Europe to have to deal with a powerful non-executive chairman. He is also the only one faced with a hopelessly unwieldy "tripartite" supervisory structure for the banking system that brings together regulator, central bank and finance ministry but leaves no one ultimately responsible.

Sants has argued that the FSA has learned some hard lessons from the crisis and is – at last – in a position to do a proper job of supervising the City. But we are unlikely to find out if he is right, thanks to Conservative plans to hand the job to a truculent Bank of England that has always resented the loss of its role as banking supervisor.

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