City's shock as Sants walks out on the FSA before split

Boss quits 'early' and potentially damages the efforts to set up new financial regulatory regime

In a shock move that could damage the Government's attempt to create a radical financial regulatory regime, the Financial Services Authority's chief executive Hector Sants quit yesterday.

Two years ago, the Chancellor, George Osborne, pleaded with Mr Sants not to leave the City regulator until the new regime set up in the wake of the banking crisis was up and running.

This system is still almost two years away, although Mr Sants had already been appointed as the designated head of the Prudential Regulation Authority which will oversee banks. He will not now take that post.

City experts said Mr Sants' resignation will throw the finance sector into confusion. Jonathan Davies, at the City law firm Reynolds Porter Chamberlain, said: "The timing of Hector Sants' resignation is astonishing given that his remit was to deliver an orderly transition to the Government's new twin peaks regulatory structure. Finishing in June before the twin peaks model is in place really is leaving the job half done."

Others pointed out that Mr Sants had been criticised by MPs over his suitability to run the new PRA.

Michael Fallon, the senior Tory on the Treasury Select Committee, had declared his "deep reservations" about Mr Sants leading the organisation. But reports said Mr Sants had been frustrated by the slow pace of change.

Adair Turner, the FSA's chairman, said: "I am very sorry to see him leave, but I understand his decision now that he has delivered what he set out to achieve."

Mr Sants' departure follows a number of high-profile resignations from government enforcement agencies including John Fingleton at the Office of Fair Trading, Richard Alderman at the Serious Fraud Office and Margaret Cole from the FSA. There will also be a new Governor of the Bank of England in June 2013.

Mr Sants was paid £800,000 in 2011 including a performance-related bonus. A former UBS banker, he could earn considerably more than that if he returns to the private sector.

The FSA will not look to replace him ahead of its division into two new organisations. Martin Wheatley, who is lined up to head the consumer-facing Financial Conduct Authority and Andrew Bailey, who was due to be Mr Sants' deputy at the PRA, will oversee the final months of the regulator reporting directly to Lord Turner.

Mr Sants, who has been at the FSA for eight years, five as chief executive, will leave at the end of June. He said: "I am proud of what the FSA has achieved during my time in charge, through incredibly challenging times."

His replacement at the PRA will be appointed by the Treasury on advice from the Bank of England. Mr Osborne said: "I am very grateful for all the good work Hector has done. He has been an outstanding public servant. He has found a natural moment to seek new challenges after eight years at the FSA and having successfully overseen planning for the transition to the new supervisory structure."

Sir Mervyn King, the Governor of the Bank of England, said: "I am sad Hector Sants has decided to stand down. I am very grateful to him for staying on longer than he had planned."

PROMOTED VIDEO
Life and Style
fashion David Beckham fronts adverts for his underwear collection
Extras
indybest
Travel
Flocking round: Beyoncé, Madame Tussauds' latest waxwork, looking fierce in the park
travelIn a digital age when we have more access than ever to the stars, why are waxworks still pulling in crowds?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Arts and Entertainment
tv
Sport
Is this how Mario Balotelli will cruise into Liverpool?
football
News
Ronahi Serhat, a PKK fighter, in the Qandil Mountains in Iraqi Kurdistan
i100
Arts and Entertainment
Poet’s corner: Philip Larkin at the venetian window of his home in 1958
booksOr caring, playful man who lived for others? A new book has the answer
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

Junior Quant Analyst - C++, Boost, Data Mining

£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...

Service Desk Analyst- (Desktop Support, Help desk)

£25000 - £35000 per annum: Harrington Starr: Service Desk Analyst- (Desktop Su...

Junior Quant Analyst (Machine Learning, SQL, Brokerage)

£30000 - £50000 per annum: Harrington Starr: Junior Quant Analyst (Machine Lea...

UNIX Application Support Analyst- Support, UNIX, London

£45000 - £55000 per annum: Harrington Starr: UNIX Application Support Analyst-...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape