Sants to step down with FSA future in doubt

The chief executive of the UK Financial Services Authority (FSA), Hector Sants, will leave the regulator later this year. Sants said he would step down “this summer”, having always planned to serve for only three years since taking the post in July 2007.

The FSA said it would announce the procedure for selecting his successor “in due course”.

It is possible Sants will be the last FSA chief executive. A general election is due in the UK by May, and the opposition Conservative Party said last year that, if elected, it would abolish the regulator, which was created by then chancellor of the exchequer Gordon Brown in 1997.

Under the Conservatives’ plan, the FSA’s responsibilities would be divided between the Bank of England and a newly created Consumer Protection Agency and Financial Crime Agency – the latter also taking over the functions of the Serious Fraud Office.

Other opposition parties, however, oppose the plans to split up the FSA. Vince Cable, shadow chancellor for the Liberal Democrats, commented on February 9: “We don’t know if [Sants’ resignation] is a direct result of the Tories’ stance on the FSA’s future but what we can say is that their proposals are creating uncertainty for an organisation that has a vital role to play.”

The uncertainty over the authority’s future has already made it difficult for the FSA to recruit the staff it needs to expand its supervision and enforcement operations.