FSA to be scrapped in 2012- Sants to stay
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FSA chief executive Hector Sants is to remain at the regulator to oversee its transition into a new prudential authority which will be a subsidiary of the Bank of England.
Sants, who was expected to leave the FSA this Summer, will also become a deputy governor of the Bank of England and the first chief executive of the new prudential authority as the FSA is replaced in 2012.
The fundamental shift in UK financial services regulation, announced last night in Chancellor George Osborne’s Mansion House speech, will also see the creation of a new Consumer Protection and Markets Authority to regulate all authorised firms.
The sweeping changes give huge extra powers to Bank of England governor Mervyn King who will also be responsible for a new Financial Policy Committee which will have the power to address macro issues that threaten financial stability.
King says: “We shall aim to avoid an overly legalistic culture with its associated compliance-driven style of regulation. That is an important reason for the separation of consumer protection and market conduct from prudential regulation. We must reverse the seemingly inexorable trend towards more regulation and more regulators. That did not work in the past and is not the right response now.”
FSA chairman Lord Turner says: “In particular I am delighted that Hector, who has done so much to transform the FSA during the past few years, has agreed to lead the transition to the new structure in 2012, and to become the first chief executive of the prudential authority and a deputy governor of the Bank of England.
“The crisis demonstrated the need for new regulatory approaches and more intense supervision, and the FSA has already implemented major change. But it also demonstrated the need to bridge the gap between macro-prudential policy and the supervision of individual firms. The Chancellor’s proposals for prudential regulation will enable us to do that, while building on the major changes we have made over the last few years. The timescale will enable us to manage the transition in a smooth and orderly way. “
Lord Turner says there are a number of important issues still to be resolved, particularly around arrangements for enforcement and markets activities. He says: “We look forward to working closely with the Government in considering the relative merits of different possible arrangements for these.”
Lord Turner told BBC Radio 4 this morning that he would be leaving after 2012, although he has been tipped as a future successor to King.
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Readers' comments (29)
BRIAN ROONEY | 17 Jun 2010 8:56 am
Great news- no more FSA- but not so good news- Hants to stay on............
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Doug | 17 Jun 2010 9:08 am
Yes good news indeed - but i suspect with the focus on the banks we will have to wait a bit to see if the RDR is to go the same way, be delayed, or continue as is. I think the later is not really on the cards anymore.- especially given the speech in Nov 2009 by the then Tory Shadow Pensions minister Nigel Waterson where he said:-
"There is a risk advice will become more expensive rather than more accessible,"
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Simon Mansell | 17 Jun 2010 9:26 am
I consider the Financial Services and Marketing Act 2000 to have given the FSA power without accountability and this should be an opportunity for the legislators to have get it right but this time operate within the rules of natural justice and the Human Rights Act. Sants is just a cog in the wheel – he will do what the legislation empowers him to do – it is the legislation that is at fault.
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Michael Fallas | 17 Jun 2010 9:27 am
Not convinced that keeping Sants is a good idea but we will soon find out. Would have preferred a clean sweep with some new blood less used to the "old ways", but I guess you need to have someone who knows the "old ways" for a while.
Nothing on RDR though or indeed on any other changes so I guess more of the same just a different hat.
Progress - probably not yet.
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Anonymous | 17 Jun 2010 9:31 am
So the Mad Hatters tea party carries on.
All move seats then heads down in the feeding trough lads.
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Tom IFA | 17 Jun 2010 9:32 am
No More Gordon Brown, HIPs gone and now Bye Bye FSA does that mean all my wishes have been used up?
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Anonymous | 17 Jun 2010 9:34 am
Great news FSA going but how much will it cost IFAs to be registered with new regulator? Will we now see the RDR put in the bin and get sensible regs...I doubt it
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Steven Farrall (Adviser Alliance) | 17 Jun 2010 9:37 am
Hants will be a K asap. My bet that that was his 'price'.
The new Consumer Protection cobblers will be worse than the FSA as it will think that it still has the universal wisdom as to what's best for everyone else.
Better get lobbying now chaps.
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Anonymous | 17 Jun 2010 9:39 am
Hector Sants will no doubt get a big payday from the FSA and a golden handshake from the Bank of England.Anyone else with his track record of failure would not even be considered for the post.JOBS FOR THE BOYS as always
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John Hooper | 17 Jun 2010 9:56 am
An opportunity to treat and respect IFAs as true professionals (assuming they have the relevant qualifications, experience and achieved a level of responsibility- like other professionals).
Were there any IFAS or their representatives at the Manor House last night?
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