NCIAL Services Authority (FSA) chief executive Hector Sants yesterday plunged the City regulator into disarray as he confirmed his resignation in the summer, although he was widely tipped to return to public office under a future Tory government.
Shadow chancellor George Osborne, who is understood to be keen to see the FSA chief return to public office if the Conservatives win the next election, paid personal tribute to
Sants on Monday in a private meeting.
“I have found [Sants] to be an intelligent, diligent and committed public servant,” Osborne said. Sants has been touted as a candidate for the next deputy governor of the Bank of England, which will take over the supervision of bank risk from the FSA if the Tories come to power. However, he has been a vocal defender of the existing tripartite system of regulation, saying last year that its abolition would mark a return to the “dark ages”.
Sants insisted yesterday that he had always planned to serve as chief executive for a three-year term.
“Those three years have encompassed the most extraordinary circumstances for a financial regulator, and 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,” he said.
But the City was rife with warnings that his resignation could lead to further damaging uncertainty.
Treasury Select Committee chairman John McFall said: “I think it is rather unfortunate… Discontinuity at this time is perhaps not helpful to financial stability but [Sants] has made his decision.”
And Michael McKee, a financial regulatory partner at law firm DLA Piper, said: “His departure is bound to affect morale and leave the FSA in limbo until after the election.”
The FSA said it would announce its succession plan in due course.