Tracey McDermott: FCA’s acting head rules herself out as permanent boss of City regulator

Chacellor George Osborne made the surprise announcement during an interview with the BBC

James Moore,Nick Goodway
Friday 08 January 2016 01:50 GMT
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Osborne says he is worried 'about a creeping complacency in the national debate about our economy'
Osborne says he is worried 'about a creeping complacency in the national debate about our economy' (Getty Images)

The runaway favourite to become the new head of the Financial Conduct Authority has shocked the City by withdrawing from the recruitment process despite growing speculation that her appointment was all but assured.

George Osborne made the surprise announcement that Tracey McDermott, acting head of the FCA, did not want the job permanently in a BBC interview.

In a statement hurriedly released in its wake, she said: “Going through the recruitment process has made me reflect on what I want to do with the rest of my career. As a result, I have decided that this is not the right job for me at this stage of my career. This was a decision taken after many months of careful thought and was not one that I took lightly.”

Ms McDermott, a 15-year veteran of the FCA and the Financial Services Authority that preceded it, will continue to run the regulator until a replacement is found. She said she remained “committed to, and passionate about, the important work we do”.

As part of that work she will have to defend her decision to drop a review into Britain’s banking culture, which had been identified as a key priority in the FCA’s most recent business plan.

Andrew Tyrie, the chairman of the Treasury Select Committee, has described the move as “curious” and told Ms McDermott and FCA chairman John Griffith-Jones to attend a hearing.

Both the FCA and the Treasury have insisted that the decision was made by the regulator alone and no pressure was brought to bear on it.

Despite the controversy, Ms McDermott was thought to have been within weeks of being unveiled as the watchdog’s new permanent boss, having taken over from Martin Wheatley in the summer after he was forced out by Mr Osborne. Her decision leaves the Treasury, which is handling her successor’s recruitment, with a problem; its headhunter, Zygos, will have to decide whether to restart the process of drawing up a shortlist for the £700,000-a-year role.

Its original list is understood to have been headed by Ms McDermott but also included the Australian securities regulator Greg Medcraft and the British head of the Swiss regulator Finma, Mark Branson – as well as, reportedly, one other unidentified person.

Mr Osborne’s fall-out with Mr Wheatley, and his comment that the age of “banker bashing” has ended, have led to speculation that the new FCA boss will have to tread a fine political line as the Government attempts to improve its strained relationship with London’s financial centre.

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