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
Arts and Entertainment
tv
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
Life and Style
fashionModel of the moment shoots for first time with catwalk veteran
Life and Style
fashionAngelina Jolie's wedding dressed revealed
Sport
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
footballRadamel Falcao and Diego Costa head record £835m influx
News
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Madame Vastra and Jenny Flint kiss in Doctor Who episode 'Deep Breath'
tv
Arts and Entertainment
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Arts and Entertainment
Danish director Lars von Trier
tvEnglish-language series with 'huge' international cast set for 2016
Life and Style
tech
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

Executive Assistant/Events Coordinator - Old Street, London

£35000 - £38000 per annum + benefits: Ashdown Group: Executive Assistant/Event...

HR Generalist (standalone) - Tunbridge Wells - £32,000

£30000 - £32000 per annum: Ashdown Group: HR Generalist (standalone) - Tunbrid...

Derivatives Risk Commodities Business Analyst /Market Risk

£600 - £800 per day: Harrington Starr: Derivatives Risk Commodities Business A...

Power & Gas Business Analyst / Subject Matter Expert - Contract

£600 - £800 per day: Harrington Starr: Power & Gas Business Analyst/Subject Ma...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering