Page last updated at 15:20 GMT, Tuesday, 9 February 2010

Hector Sants to step down from top FSA post

Hector Sants
Hector Sants said last year banks should be 'very afraid' of the FSA

Hector Sants, the chief executive of the Financial Services Authority (FSA), has announced he is to step down as head of the City regulator.

Mr Sants said he would leave in the summer, as planned, after three years in the job.

He has been chief executive throughout the credit crisis, a period which he described as "extraordinary circumstances" for the FSA.

It has been criticised for failing to adequately control banks' risk-taking.

In a statement Mr Sants said: "I am very proud of the manner in which the FSA rose to the challenge of dealing with such unprecedented turbulence across global financial markets."

"Moreover, I believe the FSA candidly examined the failings in financial regulation that contributed to the onset of the crisis, learned the lessons and has gone on to reform itself into a much stronger and better equipped organisation."

Hugh Pym
By Hugh Pym, Chief economics correspondent

There are two versions of this story. One is that Hector Sants was always going to quit the FSA after three years - he had made that clear to the authority when he joined in July 2007.

The other is this - as chief executive of an organisation which is going to be pulled apart if the Conservatives win the election, he is putting down an early marker for a new job. And Mr Sants has made no secret of his opposition to the Tory plans.

The reality probably lies somewhere in between the two. Until it is clear who will form the next government the FSA will be in limbo, with senior staff uncertain about their future. It is far from the ideal backdrop to the crucial and unresolved debate on the future of banking regulation.

Mr Sants leaves at a time of uncertainty for the financial regulator.

The Conservatives have said they would abolish the FSA and transfer the bulk of its responsibilities to the Bank of England if they were to win the forthcoming general election.

This has left the FSA in limbo, says BBC economics correspondent Hugh Pym. "It is far from the ideal backdrop to the crucial and unresolved debate on the future of banking regulation."

The FSA faced criticism that it failed to prevent the credit crisis by not restricting risk-taking at banks such as Northern Rock, which built up huge liabilities.

Mr Sants led the fightback and oversaw an overhaul of banking regulation, saying banks "should be very frightened" of the regulator.

He has worked at the regulator since 2004 when he joined from investment bank Credit Suisse First Boston.

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