Hector Sants’ resignation will throw finance sector into confusion
Hector Sants’ resignation this morning is surprising given that his remit was to deliver an orderly transition to the government’s new twin peaks regulatory structure.
This follows closely after the news of Margaret Cole's departure. The FSA said she "will remain in her current role and on the FSA Board until the end of March, prior to the creation of twin peaks within the FSA on 2 April. She will then be on gardening leave until 31 August 2012 but may represent the FSA during that time on issues not related to individual regulated firms or ongoing investigations."
The FSA's press release today about Hector Sants says:
"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 (PBU) the part of the FSA mirroring the future PRA, Martin Wheatley will remain the head of Conduct Business Unit (CBU) and future CEO of the FCA. Following Hector’s departure both will directly report to Lord Turner."
Hector Sants was specially recruited by the Government in 2010 (and brought back from a previous resignation) specifically to implement the twin peaks regulatory reforms. He leaves with the job far from complete, not waiting for the legislation to pass through Parliament and be implemented.
Most significantly, he's leaving before the problems of the new regime have had a chance to emerge, rather than staying to solve them. The regulated sector may therefore be unconvinced by his view that "Now is the right time to hand over to those who will deliver the long term goals of the future PRA and FCA."