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Business News

FSA staff jump ship as City regulator nears split


The Financial Services Authority is losing an increasing number of employees as the City regulator moves closer to being broken up by the Government.

In the first five months of this financial year, 202 members of staff left the watchdog, a 26 per cent increase on the same period last year, according to figures supplied by the FSA.

In April, 54 people left after they were paid their annual bonuses, up from 36 the year before when the City jobs market was booming.

At least 30 full-time employees walked out of the FSA's Canary Wharf offices in each of the past five months. In total, 352 employees left the FSA in 2010-11, compared with 181 the year before.

The watchdog has seen a string of high-profile resignations, including some of its heavy hitters on global issues. Thomas Huertas, who headed the international division, announced over the summer that he was quitting for a job at the accountancy firm Ernst & Young.

Alexander Justham, the FSA's director of markets, handed in his resignation in July but will not formally leave until the end of January when he completes three months' gardening leave.

Other departures in the past two months have included Kathleen Reeves, the regulator's former head of human resources, who left for a job at Icap, the FTSE 100 interdealer broker.

More employees are leaving the FSA as it prepares to be split into two by early 2013, when a supervisory arm will move to the Bank of England and a separate financial conduct agency will be established.

The quickening rate of attrition raises questions about the regulator's ability to manage the transition, and to hold on to the staff it needs as it goes through the restructuring.

The FSA itself says the departures are partly cyclical. Jane Cathrall, the acting director of human resources, said: "Turnover has picked up since the crisis and these figures show the impact of what is traditionally the busiest period of the year for financial services recruitment. We continue to be able to attract high-quality people to the FSA."

Although the recent turmoil in the markets and the darkening economic picture have meant that the the City job market has ground to a halt, after a boom in 2010, regulatory expertise is still in demand as companies grapple with a deluge of new rules following the financial crisis.