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Thursday, 12 December, 2002, 18:05 GMT
Sir Howard Davies: Super-regulator
Sir Howard Davies, who has resigned as the first head of the Financial Services Authority, has faced a massive task in restructuring the entire regulatory system.

He recently told BBC News Online that the FSA was "the most accountable regulator in the world."

But his problems have including the collapse of Equitable Life, the scandal of the split-capital trusts, and fears about the viability of endowment mortgages.

He moved to the FSA from the Bank of England, where he was in charge of banking supervision.

And he was widely tipped to become the next governor of the Bank, before last month's announcement that Mervyn King would be taking over from Sir Edward George in that role.

Howard Davies' career
Foreign Office, Paris
McKinsey & Co, management consultants
Special Advisor to Chancellor Nigel Lawson
Controller, Audit Commission
Director General, CBI
Deputy Governor, Bank of England
Chairman, FSA

Ironically, he was poached by Gordon Brown when the Chancellor decided to separate the Bank's regulatory functions from its role in setting interest rates.

The FSA has also had to tackle money laundering, which has been made more acute by worries about terrorist finance after September 11, and it has had to crack down on market abuse by financial institutions.

Sir Howard is generally seen as a skilled bureaucrat, and was able to manage the transition from self-regulation to the more legalistic approach of the FSA.

Balancing Act

But he has had a difficult job dealing with the competing interests of the industry and consumers.

The financial services industry has, at times, feared that his heavy-handed approach would damage the economic viability of the City, one of the UK's biggest sectors, by adding to the cost of regulation.

At the same time, consumer groups have criticised him, accusing the FSA of favouring the industry and not protecting the interests of consumers.

Sheila McKechnie, director of the Consumers' Association, told BBC News Online that the FSA lacked "bite" and only gave it 5 marks out of 10.

She has been particularly critical that it has taken a "softly, softly" approach.

She has also criticised the way it has handled the problem of endowment mortgages, which might not now earn enough money for people to pay off their mortgage debts at the end of the term.

He defended himself to BBC News Online, saying that "the accusation of pandering to vested interests and big finance, sometimes thrown at us by consumer organisations, does not really stand up."

CBI career

Sir Howard is leaving as the life insurance industry is facing its biggest crisis ever, with the fall in the stock market raising questions about the viability of personal pension schemes.

It is the role of the FSA to ensure the financial stability of the banking and insurance sector as a whole, as the world economy faces the threat of recession.

Sir Howard comes from an academic and management background, and has risen effortlessly from adviser to the Conservative Chancellor Nigel Lawson to head of the Audit Commission and then Deputy Governor of the Bank of England.

In between, he was director general of the CBI, leading the employers' organisation to closer links with government.

He was educated at Manchester Grammar School and Oxford University, before joining the Foreign Office and then the Treasury.

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