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Sants warns over new BoE governor role and European banking plans

Outgoing FSA chief executive Hector Sants warns the responsibility of the governor of the Bank of England in the new regulatory set up could be too much for one individual.

In 2013, the successor to current BoE Governor Mervyn King will be tasked with heading up the regulation and supervision of banks and big financial institutions.

Giving an interview to the BBC’s business editor Robert Peston, Sants (pictured) warns the role could be too much for one person given the size of the task.

Sants says: “We could be concerned that the operational task given to the governor, as an individual, is just too great. I think the risk is that operationally this is going to be too difficult for just one person to manage.”

Until announcing he was to quit the regulator earlier this year, Sants was due to head up the new Prudential Regulation Authority which will sit within the Bank of England. The Treasury select committe has raised a number of concerns about governance and accountability issues given the new powers the bank will be taking on.

Sants also warns of the dangers of the UK sitting outside the banking union proposed by the European Commission. Chancellor George Osborne has indictated that the UK is unlikely to want to be part of the type of banking union proposed this week by EC president Jose Manuel Barroso.

He says: “If you move to an environment where the majority of the countries were inside the eurozone and therefore had a somewhat different agenda in respect to the rulebook, that would become an unworkable model where we would become dependent on a rulebook that we had effectively no control over.”

Sants suggests the Government and the BoE could have avoided a run on Northern Rock if they had taken up his idea to provide a loan to Lloyds to buy the bank.

Sants says: “I think things would have been different if the Government and Bank had taken my recommendation that they should provide liquidity support to Lloyds to purchase Northern Rock

“I think that would have made a difference. It would have avoided the queues at Northern Rock and it would have changed the general climate in relation to the old building society sector that had moved into the banking sector.”

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. SO, let’s have a referndum on remaining in the EU community and put this rubbish to bed once and for all.

    EU rules are ruining our country, our judicial system, our financial system and nothing good will come of trying to maintain the myth of one currency throughout the community.

  2. Roman Duzinkewycz 13th June 2012 at 9:10 am

    Is he still here?

  3. It’s a bit rich for Hector Sants to suggest that had the BofE taken his advice the run on the Northern Rock could have been avoided.
    Was not the FSA supposed to be regulating the Banks at the time and was it not the FSA who failed miserably to detect the banking crisis coming?
    Difficult to see how he now expects us to take his advice seriously in the light of the FSA’s track record. Those old enough may also recall how the FSA totally failed to see the collapse of Equitable Life coming when many in the financial services industry knew they were in trouble long before the collapse simply by checking data already in the public domain.

  4. So Sants is now trying to distance himself from the banking fiasco, which we all know in reality he was part and parcel of being the head of the regulator that failed to act accordingly. This man is an absolute joke and history will show him and his policies for financial services to be an abject failure. He has no scruples and he has no morals.

  5. Teflon is a marvellous invention especially when combined with that most cherished of attributes; hindsight!

  6. Who cares what Hector Sants thinks? End of…

  7. Mr Sants clearly still suffering from delusions.

  8. Not to MM. Please stop giving ths man press time. He is a beaten docket and in two week will disppear from his role & public view all together for 6 months. He has done enough damage to this this industry in the past -please stop pandering to his ego by giving any space to what he says.

  9. I don’t remember Hector saying anything at the time? Didn’t his buddy Lord Turner say Hector wasn’t involved in this sector back then so couldn’t have got involved? I do remember that for years it has been said that the banks should be more closely monitored/regulated – does Hector? Is he trying to ease his way in to the BoE by saying it is too much for one man to cope with – lets hope not.

  10. Self deluded ravings Blair would be proud of.

  11. Talk about the pot calling the kettle black. This man has left the FSA in chaeos. He is now on “garden leave” being paid for by us untill the end of December. He should zip it an concentrate on his garden.

  12. UM !!

    So let me get this straight Hector wanted the BOE to lend millions to an already failing bank to bail out a failed building society !!

    Little wonder Merv told him to keep his stupid ideas to himself

    Plus its a bit rich of Hector to whine on about the role of BOE being to much for one person

    I think he is up for the next clown act on BGT.

  13. Hector Sants categorically stated in a TSC grilling that at the time of the credit crises he was not involved in that end of the FSA. So how is it all of a sudden that he is suggesting his recommendation would have saved the country at the time. This man should be tested for drugs as he seems to think he is a legend (in his own mind). Get him out ASAP

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