Head of financial watchdog to step down

Hector Sants has resigned after three years as chief executive and the process to appoint his successor will be announced in due course, the regulator confirmed.

Mr Sants had been vocal in opposing plans by the Conservatives to disband the FSA and hand greater powers to the Bank of England.

With the future of the FSA unclear after the general election, it is thought the FSA will hold off until after then before deciding on plans for a successor.

The FSA stressed it was a "personal decision" by Mr Sants to quit and that it would be business as usual for the chief executive as he works out a six-month notice period. He said he always planned to serve a three-year term as head of the FSA.

"When I was appointed I told the board that I planned to serve as CEO for three years, and I intend to stick to that timetable," he said.

Mr Sants – a former Credit Suisse banker – headed the FSA through the most testing time in its history.

He recently pledged a tougher, more intrusive regime of regulation after the FSA came in for heavy criticism over its failure to anticipate and prevent the banking crisis.

Mr Sants publicly admitted that mistakes were made by the regulator and told the industry to "be afraid" under a new hard-line approach.

Mr Sants insisted yesterday that he was "very proud of the manner in which the FSA rose to the challenge of dealing with such unprecedented turbulence across global financial markets".

He added: "I believe the FSA candidly examined the failings in financial regulation that contributed to the onset of the crisis, learned the lessons and has gone on to reform itself into a much stronger and better equipped organisation."

But the Conservatives are proposing to either abolish or radically reduce the responsibilities of the FSA if they get into pow-er.

It is understood Mr Sants has made no secret of the fact that he would not seek a role within a merged FSA/Bank of England regulator, although it is unclear what he plans to do after he leaves this summer.

FSA chairman Lord Turner said the regulator was "immensely sorry" to lose Mr Sants.