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
A monstrous idea? Body transplants might no longer be science fiction
Science An Italian neurosurgeon believes so - and it's not quite as implausible as it sounds, says Steve Connor
Demba Ba (right) celebrates after Besiktas win on penalties
footballThere was no happy return to the Ataturk Stadium, where the Reds famously won Champions League
Arts and Entertainment
Natural beauty: Aidan Turner stars in the new series of Poldark
arts + ents
Mia Freedman, editorial director of the Mamamia website, reads out a tweet she was sent.
arts + ents
Arts and Entertainment
The write stuff: masters of story-telling James Joyce, left, and Thomas Hardy
arts + ents...begging to differ, John Walsh can't even begin to number the ways
Jose Mourinho on Sky Sports
footballEXCLUSIVE COLUMN Paul Scholes: It was not a leg-breaking tackle, as the Chelsea manager had claimed
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Telesales / Marketing Executive - B2B - OTE £25,000

£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...

SThree: Trainee Recruitment Consultant

£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Recruitment Genius: Business Control Manager

£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower