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The writing’s been on the wall for FSA’s Hector Sants for some time

March 16th, 2012

I am not surprised that Hector Sants, who has been chief executive of the FSA since July 2007 and joined it from Credit Suisse in May 2004, has resigned. He is to remain in post until June 29th to assure a smooth handover as the organisation moves towards its “twin peaks” regulatory model, an FSA press officer told me.

Sants, who as CEO-designate of the proposed successor body the Prudential Regulatory Authority was poised to become deputy governor of the Bank of England, may be stepping down because he is:

(a) scared that he might struggle at the a pre-appointment hearing at the Treasury Select Committee due to be take place by June, especially given his faltering performance in the Thatcher Room on January 30.

(b) concerned that the FSA’s shocking regulatory failures will increasingly come into the open in coming months. Its pre-crisis failure to regulate RBS is expected to be brought into sharp focus in a circa £3bn investor law suit against Fred Goodwin and RBS due to be heard in the High Court in June or thereabouts.

(c) recognised that there’s a limit as to how far the regulator can bend the truth to mask its past failures?

(d) taken a hint from the Conservative Party deputy chairman, Michael Fallon MP, who was fairly clear that he did not believe Sants should not get the PRA or BoE jobs when I spoke to him last month (See my exclusive Herald story Fallon moves to prevent Sants appointment as head of FSA successor body). There’s also a possibility that Bank of England governor Sir Mervyn King has mobilized forces against Sants…

(e) concerned that the FSA’s conduct regarding HBOS, and in particular its conduct relating to the ‘BoS Reading fraud‘, could further compromise his position once this becomes public. Perhaps Sants decided to make himself scarce before the proverbial hits the fan?

I particularly liked what Neil Robinson, a internet strategy consultant and twitter friend of mine, had to say about Sants’ decision to throw in the towel. This morning Neil tweeted

@zenstrategist Hector Sants failed to see it coming, failed to act when it happened & failed to fix it. An ideal candidate to join the #big4 auditors.

Here’s excerpts of the FSA press release announcing Hector Sants’ departure.

16 March 2012

FSA chief executive to leave organisation at the end of June

Hector Sants, chief executive of the Financial Services Authority, has announced his intention to leave the organisation at the end of June 2012 … In February 2010, Hector was asked, and agreed, to stay on as CEO in order to deliver the Government’s plans and to help achieve an orderly transition from the current system of regulation to the proposed future model.

Sants said: “Now is the right time to hand over to those who will deliver the long term goals of the future PRA and FCA … I am proud of what the FSA has achieved during my time in charge, through what have been incredibly challenging times.”

Adair Turner, FSA chairman, said: “Hector is a truly outstanding public servant of great integrity and has provided the FSA with dedicated leadership and focus through extremely turbulent times. I am very sorry to see him leave but I understand his decision, now that he has delivered what he set out to achieve. I’d like to thank him for all that he’s done.

Hector’s last working day in the office will be the 29th June 2012. Upon his departure, Andrew Bailey will take over Hector’s role as head of the Prudential Business Unit the part of the FSA mirroring the future PRA, Martin Wheatley will remain the head of Conduct Business Unit and future CEO of the FCA. Following Hector’s departure both will directly report to Lord Turner.

 

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Posted by on Mar 16 2012. Filed under Blog. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

3 Comments for “The writing’s been on the wall for FSA’s Hector Sants for some time”

  1. […] was no saint when it came to the regulatory failings at the FSA, but perhaps he wasn’t the sinner that some have made him out to be. My latest column for Financial […]

  2. […] the organisation moves towards its “twin peaks” regulatory model, an FSA press officer told me. Continue reading… This entry was posted in Uncategorized by MFG UK Clients. Bookmark the […]

  3. Former FSA chief executive Hector Sants was putty in the hands of Sir James Crosby, HBOS’ ex-CEO. The FSA allowed itself to be used as a shield for HBOS’s activities including the money laundering in the horrendous Vavasseur fraud.

    They are no ‘authority’ at all, but an organisation that has thrived on financial corruption. And that is no understatement. Their fines have steadily increased in recent years, as financial crime has had its sharpest growth curve, ever.

    Not only has the useless FSA been rewarded for failure for the duration of its existence, its methods help no one but the financial institutions and, indeed, promote MORE crime – as the more financial crime that the FSA enables, the more it gets paid when it ‘punishes the offenders’.

    Starting as FSA director in January 2004, James Crosby was soon the FSA’s deputy chairman. He had his string-pulling to ensure the regulator helped covered up high level financial crime down to a tee by the time he was forced to step down on 11 February 2009.

    Now all we need is to call Crosby back for urgent questioning — and to finally bring this man to book.

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