Sants's three years at the top

Hector Sants’s three years as chief executive of the FSA must be among the most eventful of any regulator in history.

Sants took over the role from John Tiner in summer 2007, mere months before Northern Rock had to seek emergency loans from the Bank of England, and the full force of the US sub-prime mortgage crisis hit British shores.

In the early stages of the crisis, Sants continued to stress the importance of the FSA's principles-based strategy.

In October 2007, he said: "To be clear, I believe the recent events surrounding Northern Rock reinforce rather than contradict this need to focus on the outcomes and consequences of management actions rather than just on the compliance of the actions with a set of rules."

However, as the months wore on and the sub-prime mortgage crisis turned into a full-on global economic crisis, threatening the financial stability of the world, principles gave in to pragmatism.

By March 2009, Sants had realised the limitations of principles-based regulation, and said: "To suggest that we can operate on principles alone is illusory particularly because the policy-making framework does not allow it."

Some say Sants had inherited a poisoned chalice when he took over an organisation already on the brink of serious failure over Northern Rock, but this didn't help him when the issue of FSA directors' salaries came to the attention of the UK media.

In 2007/8, the same year Northern Rock failed and became a nationalised bank, FSA directors increased their pay by 22% to £3.2m. To his credit, Sants refused to take a bonus that year, but with a £653,000 salary he probably didn't need to.

Early 2008 saw a raft of enquiries and investigations following the Northern Rock scandal, but in many ways this was the calm before the storm, with Sants's real challenge not apparent until the autumn of that year.

Stock markets had already been hit hard by the sub-prime mortgage crisis, but nothing could have prepared the financial services industry and its regulator for the events of 15 September 2008.

When Lehman Brothers filed for Chapter 11 bankruptcy, and the FSA stepped in to prevent British bank Barclays from saving the US investment giant, a global financial crisis ensued.

The events that followed saw the UK financial system close to failure, and billions of taxpayers money poured in to save it.

As the dust began to settle in early 2009, the public, the media and the politicians all began to ask: "where was the regulator?"

Adair Turner says Sants was pivotal in the FSA's recent reforms, and has left the FSA in strong shape with a clear strategy for the future.  He believes the work of Sants and his senior team will help prevent a future crisis.

Has Sants really made a difference? Only time will tell if the changes in the way the FSA operates can help prevent a future crisis.

However, with a general election due in the early summer, and the Conservatives promising to change the UK's regulatory system, Sants could be remembered as the last leader of yet another extinct regulator.

Who should take over from Hector Sants?  Check out our poll

HECTOR SANTS CV

Sants studied at Clifton College and Corpus Christi College, Oxford.

Prior to joining the FSA as head of wholesale and institutional markets in 2004, he was European chief executive for Credit Suisse First Boston (CSFB) and a member of the firm‘s Executive Board.

Before that, he held a number of senior investment banking management roles including at UBS in London and New York.

He was a member of the FSA Practitioner Panel and was previously a Board member of, among other bodies, the SFA and the London Stock Exchange.