Davies drafts old guard into new City regulator

The financial services mega-regulator, SuperSIB, came a step closer yesterday after the chairman, Howard Davies, named his key deputies. All three are currently with regulators.

Tom Stevenson, Financial Editor, reports on the creation of the new City watchdog.

The new unified City regulator began to take shape yesterday after Howard Davies named three managing directors to work under him, drawing exclusively on existing regulators to fill the posts.

He also clarified the structure of the enlarged financial services watchdog, confirming that the system of regulation by type of institution was to be ditched in favour of supervising different functions across all types of business.

Dubbed SuperSIB by the media and known as NewRO internally, the new watchdog will not be named officially until the end of the month when the new organisation will be formally launched and its new executives introduced.

By opting for a flat management structure, with no chief executive, Mr Davies found senior positions in the new organisations for the key figures in the self-regulatory organisations that will be replaced by SuperSIB.

He deliberately avoided the creation of a chief executive's position in order to maintain the loyalty of senior regulators who might otherwise have been unwilling to give up their existing fiefdoms for what they perceived to be smaller jobs.

The only surprise omission from yesterday's line-up was Securities and Investments Board chief executive Andrew Winckler, who leaves SIB at the end of the year. Like Colette Bowe, head of the Personal Investment Authority, Mr Winckler decided against swapping the top job at an existing regulator for a second-tier role in the enlarged watchdog.

The three managing directors named yesterday are:

Richard Farrant, head of the Securities and Futures Authority, who will chair SuperSIB's management committee and be directly responsible, as chief operating officer, for the regulator's internal operations, including human resources and finance.

Michael Foot, the Bank of England executive director responsible for banking supervision, who will head up a new financial supervision function encompassing all types of institutions.

Phillip Thorpe, who has headed the Investment Management Regulatory Organisation (Imro). He will lead an authorisation and enforcement division and take on responsibility for consumer relations.

Gordon Brown, Chancellor of the Exchequer, and Eddie George, the Governor of the Bank of England, said yesterday they planned to make the appointments to the SIB board before Royal assent was given to the Bank of England Bill, which stripped from the Bank its supervisory role.

Once that bill is passed, expected to be in the spring of next year, the SIB board will become responsible for all regulation. The existing self-regulatory organisations will, however, not be officially rolled into SuperSIB until a new financial services act is passed, which might not be until 2000.

Mr Davies said yesterday that two-year transition period presented risks, but he said it was a better alternative to leaving the SROs independent. Wrapping the front-line regulators in informally would reduce the risk of staff leaving or firms dragging their feet on enforcement issues because they felt they were dealing with a lame duck regulator.

The appointments were being seen yesterday as a neat solution to a potentially difficult combination of high-profile appointments. Observers said Mr Farrant was being rewarded for running arguably the best-managed SRO, while Mr Thorpe's appointment was viewed as an appropriate prize for his deft handling of the Peter Young scandal at Morgan Grenfell in which he ensured that thousands of investors were promptly compensated.

It is thought that success, together with a series of stiff fines for regulatory transgressions, gave the 43-year-old former barrister from New Zealand the edge over Ms Bowe, whose PIA has struggled to enforce adequate redress for the pensions mis-selling scandal.

As well as running the SFA, Mr Farrant, 52, has experience of banking supervision at the Bank of England and as an adviser to the Hong Kong Banking Commissioner where he handled a succession of crises at local banks.

Mr Foot, 50, has been at the Bank of England since 1969 when he joined as an economist. His career has included a spell as head of the Bank's foreign exchange division and as the UK's representative at the IMF in Washington.

Other appointments announced yesterday included Oliver Page, a deputy director at the Bank of England, as a director of financial supervision. Martin Roberts moves from the DTI to become director of insurance and friendly society supervision.

Mr Davies said yesterday: "I now have my top team in place. All three bring particular strengths. But the key will be for us to work together as a team. We are fully committed to doing so."

The creation of the new vertical structure replaces the old system in which one office oversaw all aspects of regulation for a particular type of financial business. Mr Davies said the new system had been arrived at after an internal study backed up by outside consultants from McKinsey.

Start your day with The Independent, sign up for daily news emails
Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
Arts and Entertainment
The sight of a bucking bronco in the shape of a pink penis was too much for Hollywood actor and gay rights supporter Martin Sheen, prompting him to boycott a scene in the TV series Grace and Frankie
tv
Sport
footballShirt then goes on sale on Gumtree
Voices
Terry Sue-Patt as Benny in the BBC children’s soap ‘Grange Hill’
voicesGrace Dent on Grange Hill and Terry Sue-Patt
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
music
Arts and Entertainment
Twin Peaks stars Joan Chen, Michael Ontkean, Kyle Maclachlan and Piper Laurie
tvName confirmed for third series
Sport
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
art
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine