FSA chief executive Hector Sants says he decided to remain at the FSA in the transition to the new prudential authority out of a sense of public duty.
In February, Sants announced he would leave the FSA this summer after three years as chief executive. In a statement, Sants said he only ever intended to stay in the role for a three-year term.
The Government announced this month that the FSA is being transformed into a new prudential authority, which will be a subsidiary of the Bank of England. A new body, the Consumer Protection and Markets Authority, will regulate all authorised firms.
Speaking to journalists after the FSA annual public meeting last week, Sants said the Government approached him about staying on to oversee the transition.
He said: “The Treasury asked me to stay on and I thought it was my public duty to do so.”
Sants emphasises that the FSA will carry on with the RDR and its enhanced supervisory regime under the new regulatory structure.
He said: “May I take the opportunity to stress that we will take forward all our major policy initiatives within the new structure. We will not be deflected from delivering much needed policy reforms such as the retail distribution review. Furthermore, firms should recognise that our intensive supervisory approach will continue into the new organisational framework.”
Highclere Financial Services partner Alan Lakey says: “There are two sides to this. Either Sants is concerned that if he goes now, then the FSA may not have a chief executive while it is disbanded and transformed or he has been told by the powers above that if he does this job he will get a good salary and he might even get to take over from Mervyn King in the future, which I think is probably more likely.”