At this afternoon’s Treasury Select Committee, the FSA chief detailed new competency standards set by the regulator with regard to hiring senior staff in UK banks.
Sants said: “There is a change in our approach now. Our former process was primarily focused on probity, and there was not historically a competency review done, the view was taken that was the firm’s role to decide.
“Going forward we are changing that approach and will be judging competency for significant senior appointments at larger institutions, an interview process has now been established.”
MPs jumped on this claim, citing the recently publicated case of former HBOS group risk director Jo Dawson, who former HBOS chief executive Andy Hornby admitted had no “formal” risk qualifications, and was heavily criticised by her predessor, the infamous whistleblower Paul Moore.
Colin Challon asked Sants: “So experience would be an important factor? One of the charges levelled against HBOS was that they appointed a group risk director who did not have any risk management experience. In this instance it was the company’s decision, but going forward you may well say no, you do not recognise that person as a fit and proper person for the job?”
“Quite so,” replied Sants.