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
Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm tomorrow
Arts and Entertainment
Mark Wright and Bianca Miller in the final of The Apprentice
tvMark Wright and Bianca Miller fight for Lord Sugar's investment
Arts and Entertainment
X Factor winner Ben Haenow has scored his first Christmas number one
music
Arts and Entertainment
James May, Jeremy Clarkson and Richard Hammond in the Top Gear Patagonia Special
tv
PROMOTED VIDEO
News
File: James Woods attends the 52nd New York Film Festival at Walter Reade Theater on September 27, 2014
peopleActor was tweeting in wake of NYPD police shooting
News
Claudia Winkleman and co-host Tess Daly at the Strictly Come Dancing final
people
News
i100
Extras
indybest
News
peopleLiam Williams posted photo of himself dressed as Wilfried Bony
Sport
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
The Apprentice finalists Mark Wright and Bianca Miller
tvBut who should win The Apprentice?
News
The monkey made several attempts to revive his friend before he regained consciousness
video
Extras
indybest
News
Elton John and David Furnish will marry on 21 December 2014
peopleSinger posts pictures of nuptials throughout the day
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
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

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

Marian Keyes

The author on her pre-approved Christmas, true love's parking implications and living in the moment
Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

Bill Granger's Christmas Eve fish feast

Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

Rodgers fights for his reputation

Liverpool manager tries to stay on his feet despite waves of criticism
Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

Michael Calvin's Last Word

Sepp Blatter is my man of the year in sport. Bring on 2015, quick