UK's Chief Regulator to Step Down in June

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Hector Sants, chief executive of the Financial Services Authority (FSA), announced today that he will resign from his post in June. This sudden resignation leaves the regulatory body reeling, as several senior employees have also resigned. Sants was expected to oversee the FSA’s transition to the “twin peaks model,” effective April 2nd.  Under this structure, the FSA will be broken into two bodies, the Prudential Regulation Authority (PRA), overseeing banks and operating as a subsidiary of the Bank of England, and the Financial Conduct Authority (FCA), overseeing consumer affairs.  The twin peaks model will take effect on April 2nd, while the FSA will legally transition into the two separate bodies sometime in early 2013.

Sants released a statement today, saying: “When I agreed to stay on as CEO in 2010, I committed to stay and deliver an orderly transition to the government’s new regulatory structure. The project is now firmly on track and with the establishment of twin peaks within the FSA I will have achieved that goal. 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.

Andrew Balley, Sants’ deputy, will assume his post, and will became head of the PRA next month.

Many believe Sants departed out of frustation with the slow pace of change within the regulator, while other claim that senior Treasury committee members held deep reservations with regard to Sants’ leadership.

FSA leadership appeared relatively unfazed by Sants’ departure, with Chairman Adair Turner saying Sants “…can rest assured that he leaves behind a transformed organisation, safe in very capable hands, with a robust blueprint for the future.”

References
↑ Wall Street Journal
↑ BBC News
↑ The Guardian

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