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Why Sants' exit is embarrassing for the Tories

Robert Peston | 17:28 UK time, Tuesday, 9 February 2010

It is perfectly possible to win general elections without the support of the City and the bosses of substantial private-sector companies.

Although it doesn't normally do harm to have the rich and powerful on side - which was certainly the view that Tony Blair took as leader of the opposition Labour Party in 1996 and 1997 with his turbo-charged charm offensive on the grandee class.

So it may not be trivial that the Tories have dazed and confused a fair number of business leaders over the past fortnight.

For what it's worth (and the value of anecdote shouldn't be overstated), the question I am most often asked right now when chatting to the bosses is "have the Tories blown it?"

Which is probably a bit of pre-election hysteria. But probably shouldn't be dismissed by the Conservatives as utterly peripheral to their electoral prospects.

What miffed the more successful capitalists was what they saw as David Cameron's recent softening of the Tories' commitment to take the necessary steps to cut public-sector borrowing.

They felt his previous message - that it must be a new government's top priority to cut the public sector down to an affordable size - had been diluted. They didn't like that.

Hector SantsAnd today they're a bit uneasy about the resignation of Hector Sants as chief executive of the Financial Services Authority - because it is an open secret in the City that he is opposed to the Tories' plan for breaking up the FSA and transferring the supervision and regulation of banks to the Bank of England.

It is not that he's a much loved figure. He would not be seen as a soft touch by senior bankers. If anything, he has a talent for irking them (which is presumably what you would want from someone in his job).

But he is widely seen to be significantly more competent than is the norm for regulators - partly because he has the rare distinction of having had a successful career at the sharp end of investment banking before becoming a gamekeeper (the measure of which is that he never actually needed the money of his regulator's salary).

And it is not good for any political party to be perceived to be snubbed by the competent.

Sants takes the view that dismantling the FSA and enlarging the Bank of England - a pet initiative of the shadow chancellor, George Osborne - is an unnecessary distraction from the imperative of improving the performance of the regulatory body.

Many in the City would agree with him. And even if their credibility isn't what it was in the wake of the credit crunch, the Tory leader and his shadow chancellor would presumably prefer to have them in the tent rather than outside.


  • Comment number 1.

    The decision to hand back regulation to the Bank of England shows Osborne's inexperience. It looks like a nice wheeze, a stick to beat Brown and carve out a different position but it won't work in practice and could be actively dangerous. The FSA has got it very, very wrong over the last few years but there's nothing to suggest that the BoE would do any better. And now really isn't the time to be taking risks with important things like this.

  • Comment number 2.

    Hector Sants (resigns) - one down 4 to go....

    Somehow, I am not very chuffed as he was the least of the regulators that need to be sacked.... (from #135 earlier)

    I don't know how you think it is an embarrassment to anyone. Indeed if they are indeed embarrassed it just goes to show how little they understand the damage that has been done by the lack of integrity of our regulators.

    (Assuming they were economically educated which is not an unreasonable expectation, is it?) These regulators knew that they were standing by and watching an economic train crash for a number of years. They knew that the bubble economies they were creating would crash - yet they did nothing! They all have to go and we need new regulators with both integrity and bottle!

  • Comment number 3.

    " is not good for any political party to be perceived to be snubbed by the competent."

    I cannot believe even Sant's mum views him as competent.

  • Comment number 4.

    It's hardly a surprise that the (former) head of a large body is opposed to plans to break up the body and give his job to someone else, is it?

    But now you seem to imply that the fact one person dislikes Tory plans is enough for the party to lose credibility nationwide. This article might as well have been prefixed "This is a party political broadcast on behalf of the Labour Party".

  • Comment number 5.

    #1, "this isn't the time to be taking risks". When the FSA has got it so badly wrong what makes you think it's any less of a risk to leave the status quo as it is? At least post-change whoever is placed in charge will have the added incentive of proving it was the right decision to appoint them.

  • Comment number 6.

    I agree - right now an "on form" shadow chancellor would be better employed getting the FSA and B of E to work together. I just recall how long it took to get the FSA started last time. We don't have that time.
    In addition, I don't share the views of some here - the people in both organisations are competent - they just failed to implement and take action - but they were not without knowledge of what the problems were.
    If I were a banker I would see Sant's departure as a victory - he leaves and then joins the City. Regulators and Govt 0, City 1.

  • Comment number 7.

    It wasn't Sants who was in charge when it all went wrong. Callum McCarthy is the one who is really to blame and he's keeping his head down hoping he can evade the opprobium. And let's not forget the disasters which befell the banking system when BoE were in charge - remember Barings?

  • Comment number 8.

    Your whole argument is based on your assertion that (Sants) "would not be seen as a soft touch by senior bankers." Well the record suggests that for several years he was!

  • Comment number 9.

    The fact is the Tory plan isn't to change what the regulations are, but who does the regulating, now that is very much a deck chairs on the Titanic sort of policy.

    Lets not forget that from the moment he was elected as Tory leader almost every time economic data came out before the credit crunch Cameron would rip on Brown for "over-regulating" and being a "road block to greater prosperity" And surprise surprise when it becomes obvious that the banks weren't over-regulated he does an about face which the media cover up so much that most people I know now don't know that he spent years attacking the government for over-regulating and are incredalous when they find out!

    The other reason I think the Tories want the FSA dispanded and its job given to the BoE is abbrogation of responsibility. If there is ever an issuse during their time in office with bank regulations they'll simply say "not us, its the BoEs fault" and sack Mervyn or whoever is in charge at the time.

    The Tories have changed economic (and every other) policy so many times under cameron i'm shocked anyone has any confidence in what he says. Anyone remember the great plan to make petrol pricing fairer? By flatlining price of fuel at about 110 a litre? Another policy dropped a month later when the price went below that and never spoken of again.

    Now that Peston is reporting on why people don't want the BoE merger they'll probabl about face, jump on the bandwaggon and have the media convince the country they never proposed it in the first place and it was all Gordons idea!

  • Comment number 10.

    Peston seems to have lost it, if he ever had it. To describe Sants as competent lacks all credibility and hence Peston’s entire argument falls apart. The fact that Sants did not need his salary is hardly an endorsement as any 1/4 decent investment banker who had worked over the period of bumper bonuses Sants did would not need the money.

    Of course, the FSA’s supervision should be split into consumer and other. Most of the FSA’s regulation is not needed for commercial or professional clients and as a result the FSA has not spent nearly enough time recruiting competent people to supervise those who can otherwise so easily pull the wool over their eyes.

    Is the financial crisis not sufficient evidence of the consequences of getting supervision so badly wrong?

  • Comment number 11.

    How to turn a non event into a Tory embarrassment...well done Robert. Sants always planned to go after a three year term. this has nothing to do with Tory polic..... and anyway wasnt he the man on whose watch the FSA failed in their regulatory role of the banks?

  • Comment number 12.

    One of Harold Wilson's most famous quotes was "a week is a long time in politics". The last two weeks sound as if they have been pretty lengthy for Mssrs Cameron and Osborne.

    As luck would have it for the Tories, there are several more weeks before the electorate actually cast their votes. These extra weeks could be to their favour, or not. So it is too early to say if they have blown it, but wobbles of the proportions they have had do not help their campaign.

    Osborne's policy on the FSA smacks of rearranging the furniture on the Titanic; concentrating on the organisations or institutions, rather than what actually needs to be done differently by them to reduce systemic banking and financial services industry risk. Sant's decision is understandable, but hardly a vote of confidence in the Tory proposals.

    It is probably worth noting that it is not just the FSA that needs to change, but more significantly the whole banks and financial services industry culture. Other than Glass Steagall v2010.0, which is more organisation based rather than cultural change based, Messrs Cameron and Osborne have offered nothing.

    Cameron and Osborne's performance and response to the credit crunch, bail out and financial crisis has been somewhat less than stellar. Was Cameron going to cancel the Tory party Conference, or wasn't he? Was he going to back the state guarantees and nationalisation of banks, or wasn't he? Should there be cuts "swingeing" or not in public spending immediately, or shouldn't there?

    This policy flip-flopping is all rather reminiscent of one rather Black Wednesday 16 September 1992, when interest rates went up, then they did not, when we were going into the wider band of the ERM then we were not, when £27bn was spent to prop up the £sterling, but then it did not work.

    Another interesting anecdote on the credibility of the party's economic policy is worth investigating. The 8 point Osborne plan is barely consistent with the local MP and Council's approach to green energy and local business on the Isle of Wight in respect of objecting to planning permission requests from Vestas wind turbines and the 650 people employed there.

    Of particular note is whether the above approach to Vestas is consistent with items 5 and 8 of the Osborne plan:

    "5. Ensure the whole country shares in rising prosperity. Raise the private sector's share of the economy in all regions, especially outside London and the South-east."
    "8. Greener economy Reduce UK greenhouse gas emissions and increase share of global markets for low-carbon technologies."

    How will a coherent economic policy emerge in a Tory government, if party members object to it in practice before the government has even been formed?

  • Comment number 13.

    Robert: "have the Tories blown it?"

    Looks to me as if the Conservatives are in two minds what to do. Cameron knows that if he tells it like it is, then they will go down in the polls and probably will not win outright. Osborne, on the other hand, knows that he has to call it like it is in order to have any credibility after the election when he has to do all the hugely unpopular things that will need to be done by the next Government.

    The public don't want any more wool-pulling, but haven't really come to terms with what that means yet. A few months of a hung Parliament will soon bring it home to them because it will all fall apart in the first few months after the election, when the coalition fails to deliver the harsh remedies that are now unavoidable and the enormity of the problem can no longer be covered up by the Labour Government.

    So it's not that the Conservatives have blown it - more that they need to lose it at this stage, by telling it like it is. So then at the following General Election, in April 2011 by my reckoning, they can get in with a proper mandate and some credibility.

  • Comment number 14.

    Couldn't Mr Sant's resignation be seen in the same light as all those Labour MPs who are suddenly announcing their retirement ? ie That they expect Labour to lose.

    It would seem he would have a hard time working with a new Conservative administration.

    I don't really see how the pro-Labour spin can justifiably be put on this story - even by the BBC.

  • Comment number 15.

    Mr. PEST-on

    "Why Sants' exit is embarrassing for the Tories" - That's the title and yet you don't explain the so-called embarrassment. I can see Mr. Sants being upset angle since the Tories want to merge FSA into BoE. I can see the "walk before you're pushed" angle too. But why should a political party be embarrassed? And,if, heaven forbid, Labour win the election, does Mr. Sants then return to the FSA since under Labour the FSA remains as it is?
    No, I just think you're angling for the job of political editor - that is really why you've written this bewildering,unnecessary and long-winded article.
    I don't know what I find more fascinating - the coming general election or the catfight among BBC editors each trying to muscle in on other's territory. Do you think N. Robinson is going to give up his job that easily? You'll have to try a lot harder, son.

  • Comment number 16.

    He's been in the job for 3 years, supposedly regulating the banks. How can he be considered competent ?
    I don't normally buy into 'the BBC hates the Tories' line but this is a bit odd.

  • Comment number 17.

    Mr Sants is not exactly without bias. Why worry when the chess pieces appear to move of their own volition?

    Je suspet that he's got out now so that he can get a job before the new slimline regulators mean that there are a lot more people in that job market, whoever wins the GE.

  • Comment number 18.

    If this interpretation is true, why is Sants so confident the Tories are going to win an absolute majority?

  • Comment number 19.

    So Barings should have kept Leeson, and we should keep Brown!

    Its the way they tell 'em!

    12. At 6:42pm on 09 Feb 2010, fleche_dor wrote:
    One of Harold Wilson's most famous quotes was "a week is a long time in politics".


    Another one was

    "It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued."

    very quotable man Harold!

  • Comment number 20.

    Well done Robert, why not give people yet more evidence to point to of BBC bias.

    It is time to come clean and back up your story.

    Why is the resignation due to a possible incoming Conservative administration? Who said so, Alastair Campbell? Or was it from "sources close to" Mr Sant?

    Why do you rate Mr Sant so highly given the appalling regulation of the financial sector that has gone on it the past few years? Or was none of it the FSA's fault?

    Why is it so wrong to change the current model of financial regulation?

  • Comment number 21.

    Err, where is the story here? why all the headlines @ the BBC? - Mr Sants said a long while back that he would leave his post this summer, as planned, (after three years in the job)... more irrelevant spin me thinks Mr Peston!

    Am sure Mr Cameron will sleep soundly in his bed tonight with this headline grabbing (n0n) story... what plans for tomorrows headlines?

  • Comment number 22.






    Onward-ho says G.O. OH NO!

  • Comment number 23.

    Does anyone really believe the Tories want to regulate the City?

    Does anyone really believe Labour does?

  • Comment number 24.

    This is just random blurb padded out with a non referencable quip about the tories losing it. I would have thought that most eyes in the city would be on the PIGS contagion in the euro and whether that storm is on its way over here, but then that is what a business editor would have thought isn't it.

    Not very good at blogging anymore it seems. . . .

  • Comment number 25.

    The FSA has cost me a lot of money, get rid of the lot of them. "Buyer Beware," at least you know where you stand.

  • Comment number 26.

    Hector is going before he was pushed, a closer examination will show that he isn't actually going until June.

    It solves the problem of being sacked by the incoming Conservative administration.

    This way I imagine that his mate Gordon will reward him with a Knightood or maybe even a Peerage in his retirement honours list.

    Don't be surprsied in Gordon finds him another cushy job before long or maybe now that the banking sector is recovering he might want to go back to his original job as a merchant banker?

  • Comment number 27.

    I must admit, I really don't understand this blog post. Maybe I'm a bit simple, or maybe it's just poorly written - but I don't get the connection made between Sants going and it being "bad news" for the Tories.

  • Comment number 28.

    Much as any Government needs the support of the City (too many negative vibes going out to traders abroad is very bad news) the World outside the UK awaits a Tory win with almost unalloyed expectancy. True, the credit ratings agencies have been unsettled by the will-we-won't-we nonsense from Cameron and Osborne: but overseas investors would prefer high-pitched Tory newcomers to tired old incompetent ZanuLabour any day of the week.
    I would suggest that any doubter take a trip down to the FSA's enormous and plush offices at Number One Cabot Square. The sheer overblown hubris of the place would make most people feel that this is one Megaquango which must go: it had its teeth cynically extracted without anaesthetic by the Brown/Blair axis of Weasel, but even so it is crammed with folks who know not what they are about.

    So-called 'better regulation' is a very poor second-best to better practice. It seems to me that this is the credibility problem that both old capitalism and new politics share.

  • Comment number 29.

    This is muddled thinking, this exit is embarrassing for GB surely. Leaving the sinking ship comes to mind.

  • Comment number 30.

    APbbforum wrote:

    (1) The FSA has got it very, very wrong over the last few years but there's nothing to suggest that the BoE would do any better.

    (2)And now really isn't the time to be taking risks with important things like this.

    What tosh.
    1. - The BoE did all right up until Brown changed the rules didn't it?
    2. - Many would say now is precisely the time to make changes. Better late than never.

  • Comment number 31.

    Post 29 I was thinking just the same. Surely he is just another of Gordon's mates and appointees jumping ship before he gets pushed.

    Its amazing how many of Gordon's friends don't fancy the last few weeks in the bunker.

  • Comment number 32.

    "Sants' exit is embarrassing for the Tories.." ???

    Eh??? Says who exactly? (Thank you BBC - you know without you I'd have been convinced it was the Government that should be embarrassed. Silly me.).

  • Comment number 33.


    To summarise, the head of the FSA resigns, he disagrees with the Tories on who should regulate banks in future and hey Pesto, the Tories are red faced with embarrassment.

    This is a joke! How can public servants like yourself get away with such blatant attacks on the opposition parties?

  • Comment number 34.

    I just like that he refers to regulators as 'gamekeepers' which implies bankers are poachers.

  • Comment number 35.


    I've posted this also on 'Stephnomics'.

    Timely and interesting piece - but would anyone question the view of a Nobel prize winning economist (other than myself, of course)?

    Here's the link with the article in today's Independent:

    What Stiglitz is saying is - 'Carry on troughing' and I don't think that he meant this in conversation 'over pigs'?

  • Comment number 36.

    I want greater freedom to decide to spend my own money on. I don't like people over my head saying oh no you can't do this you can't have that, why not? I can do just as well as anyone else and I can't bear control freakery. You want us all to fit in et along be team players go by the rules, fine I can do that when it isn't all one sided.

  • Comment number 37.

    FSA is an expensive and ineffective waste of space in relation to 'macro economic and high street banking regulation and reform' as the 'problem' is to complex with rights and privileges, law, accounting, regulation - and no more 'independent' than the BoE?

    Light touch appropriate regulation and 'competition modeling' is needed and could be done by a 'special commission'?

  • Comment number 38.

    In my opinion economic growth is driven by innovation and you need freedom to do that. If nobody cuts you a break.. cest la vie.

  • Comment number 39.

    I for one, after the mess of the '80s will never ever believe that! They are terrified of saying what they really believe, that unemployment is a price worth paying.

  • Comment number 40.


    This should provide a better link?

    Who's calling who crazy here?

  • Comment number 41.

    Robert, are you mad? The FSA says Sants is leaving in June after 3 years, as was always planned. Even if he had suddenly resigned, this would not be the slightest bit embarrassing for the Tories - it would just save them the trouble of sacking him.
    #9 - laughingdevil
    You are confusing quantity with quality. The Tories were right to complain about over-regulation. Have you taken out a life insurance policy recently? If so, you will recall the pages and pages of pointless bumph the FSA insists are sent out with every quotation. Last autumn I received at least a dozen letters from various banks and building societies, all virtually identical, telling me about minor changes to The Banking Code being made at the instigation of the FSA. What a waste of good trees! None of this makes the slightest difference to consumer protection - if they want to cheat you, this won't stop them. It does however add greatly to their costs, which are, of course passed on to the consumer.
    By contrast, the FSA was clearly asleep at the wheel on bank regulation, being far too busy making law-abiding financial advisers and mortgage lenders' lives an administrative nightmare. We don't need more regulation, we just need effective regulation.

  • Comment number 42.

    In my line of work...anybody that leaves within three years would be considered as 'a bit flighty' and a 'responsibility shirker'....looks to me like Sants was pretty much par for the course in City circles!

  • Comment number 43.

    Robert wrote:

    'But he is widely seen to be significantly more competent than is the norm for regulators'


    'Gawd help us'...if we get a truly incompetant regululator then...that's really ALL I can add to this pathetic blog Robert!

  • Comment number 44.

    The apparent ownership of the government by the banks makes this all theorical. The banks are looking for a lower profile to calm the crowds who are not happy that they lost substantial amounts of retirement and savings. The banks first responded with "let them eat cake", but their political pawns suggested that this was not the proper approach and that if they just all stayed together this too would pass, and they would still have all the money. The politicans will not be asking bankers to stand by them during campaign speeches, nor loud endorsements...but will accept cash or cheques. No matter who wins they end up at the bankers door with hat in hand.

  • Comment number 45.

    I worked for many years with Sants. For anyone to describe his as competent or better in the context of his time at the FSA is simply incredible. History has already decided that Sants and his colleagues were, at best, asleep at the wheel, and at worst, culpable for a major disaster in terms of regulatory oversight. However, I do commend Sants for being a very good dis-assembler, and his decision to move on is another example of this trait. I would suggest that the real objective now must be to try and learn from the mistakes that were made and have people in charge who actually care enough to focus on the letter AND the spirit of the regulatory environment and work for the best interests of our country as a whole, and not for self preservation or scoring points. Sants may well not find that he slinks off into the sunset, but his memory will remain a painful one for many who lived through the incredible last 2 years.

  • Comment number 46.

    The FSA whilst moving forwards under Sants hasn't gone nearly far enough and they still don't apply anywhere near enough diligence when reviewing any submissions to them dealing with risk. The best example of this has been highlighted by the recent recession. There are only 2 banks in the UK with the FSA's 'advanced' corporate banking status under Basel II and which two banks were they...of course it's RBS and HBOS which I think says enough about the FSA's understanding of risk and valuing underlying assets and liabilities!

  • Comment number 47.

    How many marks out of 10 could anyone that knows the financial services markets give the FSA for their performance since their inception? Any decent government would have cleared the desks long before now. I don't think that the Conservatives should lose any sleep over this development.

  • Comment number 48.

    Sorry Robert/Mandy - Sant's departure indicates something unembarrassing for Osborne.

    Sant is getting out now to avoid being pushed ignominiously after an election.

    Rather tells you who he thinks will win.

  • Comment number 49.

    Yet more piffle from Peston. When will he do the right thing like Dear Hector and resign - or will that be an embarrassment to Labour?

  • Comment number 50.

    I have a question for Robert: when and how do you expect consumers and other non-financial-sector organisations to be held to account for their role in the 'credit crunch'?

    For example: it appears to have been common practice for new-build builders to offer discounts to buyers but to submit the 'gross' (i.e. without discount) selling price to the Land Registry, thereby creating a mini 'pyramid scheme'.

    2nd example: the estate agents are 'at it' again: creating an expectation amongst both sellers and buyers that property is now 'a bargain' and one 'can't lose' (by buying now).

    Question: have we learned nothing from the credit crunch (other than to despise bankers)?

  • Comment number 51.

    Hi Robert

    I am fascinated by your view that Hector Sants is considered competent. What the FSA is doing to the financial services industry is not competent at all.I am afraid you are out of touch Robert.

    Also the blatant politicking of this article is rather poor. One could just as easily say that Sants has no faith in Labour being re-elected.

  • Comment number 52.

    If you take a look at the goings on recently at central office with the Westminster candidate Joanna Cash, maybe they have blown it...
    On the blog page I've just looked at it says, apparently from the lady herself, 'It's official DC has changed the party!!!!!!!!'

    It's 2010, we still remember the '80s and only now it seems he's changed the party. Again.

    Herding cats is never simple. Suppose we are to believe if he can change the spots you can herd them too.

  • Comment number 53.

    You can do better than this. Hector is ok but nothing special. He certainly didn't see it coming. Perhaps he is resigning because: 1.he ought to; and 2. his masters' term is coming to a close. You know as well as I do that "moving to the BoE" is an attempt to join up policy and has very little to do with location. Banking supervision, inflation targetting and monetary policy are all part of the same place. The disaster of the last few years is fudge, divided responsibilites and general self-congratulatory complacency. You know it, I know it,so stop mucking about.

  • Comment number 54.

    This is exactly what WOTW predicted.

    Kraft to close Cadbury plant it offered to keep open

    It's also exactly what ALEXANDER CURZON and JadedJean predicted.

    Enough is enough!....we need to start doing something about this...and soon!

  • Comment number 55.

    The FSA is incompetent. It has presided over the credit crunch which Sants and is Labour cronies have been largely responsible for, due to lack of supervision of the banks, allowing them to sell credit virtually willy nilly, misselling poor savings products to naive consumers in order to "earn" bonuses, which discourages saving by those who have their fingers burnt. In addition, the FSA is trying to destroy the independant advice profession, further destroying the savings culture. The only reason I am sorry that Sants is going is that it avoids himn being sacked.

    And, judging by this blog, Robert Peston is incompetent as well.

  • Comment number 56.

    I think you're trying to communicate a message here that was never really sent.

    Please move on to more important things..... like commenting on the complete farce that was Varley the banker's appearance before the Treasury Committee, and his brilliant "proof" of how he's identified the problem with the worlds financial system.

    He says he's put all the bank failures on a "scattergraph" apparently (he must have done a very expensive MBA to achieve this) with big banks, small banks, and all sorts of banks and he says he can't see any correlation.

    But he does apparently agree that no bank should be too big to fail.

    Maybe he'd like to do another graph...... line up all banks in order of their size and then see if he can spot any correlation between the size of the banks and being too big to fail?

    I think he'll find it tends to be the larger banks that are the ones that are "too big to fail".

  • Comment number 57.

    52. At 10:32pm on 09 Feb 2010, copperDolomite wrote:
    If you take a look at the goings on recently at central office with the Westminster candidate Joanna Cash, maybe they have blown it...

    She does remind me a bit of Abi Titmuss now you mention it...

  • Comment number 58.

    the only people who can stand up for the working class are the workers themselves.the problem is they have all been drawn into the biggest ponzi sheme of all time but are now finding life at the bottom of the pyramid is not very comfatable especially when there are very few people capable of joining the base.
    if you bought a house in the 60s price increase x75,70s x30, 80s x6,early 90s x3 i wonder where we will be in 2050 ave price 10 million and wages of 1 million a year, i dont think so, i am more inclined to think the pyramid is going to exsplode and we wont have long to wait.

  • Comment number 59.

    In the words of New Orleans folk, ‘Who Dat!’ I am disappointed that you see a problem with this resignation, the man failed to do his job and most of the world have never heard of him. He has stood back whilst bankers gambled, and lost, the money entrusted in their care. He should have been pushing for the prosecution of Goodwin (RBS) for failing in his legal duty to complete due diligence on the ABN Ambro deal and stealing a massive pay off in the process. This man has just sat back and now jumps off the train as he sees the gravy run out. Does he aspire to be a politician as he sounds qualified.

  • Comment number 60.

    One other point occurs to me. Who or what is 'the City'?

    The UK financial services industry is made up of disparate sectorised firms most of which have unique trade bodies. As Henry Kissinger might have said 'who do I telephone when I want to talk with the City?'

    It's a myth bandied about to create an aura of some very powerful group. The frequent lack of a coherent collegiate view from the UK financial services sector is one of the reasons why we seldom punch our weight in EU financial services developments.

  • Comment number 61.

    Robert you have just made a fool of yourself on the Today programme by trying to continue this line of reasoning in the face of the actual evidence to the contrary...

  • Comment number 62.

    Come off it, how is this embarrassing for the tories? Head of FSA speaks out against plans to downsize FSA? You might as well say "Turkey speaks out against Christmas" - BIG DEAL

    Sants knows he'll soon be out of a job, so he's off. That's all. Frankly he and the FSA have all been so totally asleep on the job that they should have all be given their P45s a long time ago. The FSA has been a miserable failure, Brown's idea to split it from the BoE went too far, and has demonstrably not achieved what it was supposed to - witness the massive debt bubble which the FSA did nothing whatsoever about.

    Reforming the FSA is a no-brainer. Desperately spinning this story for Labour is unbecoming, though not untypical at the beeb...

  • Comment number 63.

    Getting rid of the FSA would be a good start; getting the Treasury out of the loop would finish the job.

    Let the BoE run things as it used to, and keep the thieving poiliticians away from the till.

  • Comment number 64.

    62 thecoopster

    I don't see how any of it is embarrassing for the Tories. It looks potentially embarrassing for G Broon who dreamed up the whole dang fool scheme of regulation from which we have all suffered. The FSA has been a disaster and needs reform.

    There also needs to be parliamentary reform. Labour went to sleep on the job with the Lords when they appointed some of their own to the other place, but the number of MPs needs to be reduced by half.

    The people who should not be involved in that are the MPs as they, like the incumbents at the FS won't vote for their own demise.

    I thought Sants was going early so he had a choice of jobs to go to, and he may well know some inside information that means he wanted to get out before the proverbial hits the fan. We shall wait and see.

    The next bubble is the carbon trading bubble. The prime purpose of carbon trading is meant to be to reduce the amount of carbon produced. Trading it and enabling offsets against people who produce less will not achieve that aim. What trading in carbon will do is create a bubble which will crash in 4 years time when those who got in first have got out and left the also rans with the negatives.

  • Comment number 65.

    Hector Sants has not been a good head of the FSA; he may have been marginally better than what went before, but that does not say very much! The only impressive senior regulator at the FSA is Adair Turner. Sants has pushed the line the FSA were light touch regulators across the system and now they are not. This may have been true with the top ten banks, six of which effectively went bust or had to be merged to survive on the FSA's watch, but this is simply untrue for other banks. The FSA were very intrusive and did not hesitate to flex muscles, albeit they were not consistent nor at times particularly competent.

    However, when specifically warned by practitioners, in detail, on the risks in individual banks below the top ten, for example, the Icelandic owned UK banks, the FSA did nothing and Sants denied to the Commons Treasury Select Committee that the FSA had really been warned. That says something about Sants,but not, I suggest, that he is competent. Quite the contrary really.

    The biggest problem with the FSA, other than being a bureaucratic behemoth, is the way it was established by Gordon Brown. It has four statutory objectives all of equal weight. One of these is consumer protection, which while important has been concentrated on in terms of resources within the regulator and output from the regulator to the detriment of the other objectives, particularly the health of the financial system. This still continues even today, notwithstanding what we have been through. That is not the mark of a competent organisation headed by a competent man. the sooner this is scrapped the better. At least the BofE in the last thirty years only lost one bank at a time, with a decent interval between failures!

  • Comment number 66.


    I Agree WITH ONWARD HO at 22......................God forbid if Goerge Osborne gets in, this man is DANGEROUS!

  • Comment number 67.

    Decent people accept their responsibilities and 'fall on their swords' after presiding over disasters. If that's what Sants has done, though he's taken a long time over it, he's finally got one thing right. A lot of others should do the same or rather should have done several months ago.

    With the UK electorate's recent experience, I would have thought the suppport of the City was the last thing any party would want to take into the next election.

  • Comment number 68.

    Might be logical to follow the political practice of Ancient Rome. No-one elected to Parliament unless already a
    millionaire. This would rid us of the farcical idea that Parliament represents the common man. In fact the
    interests of the common man, and the health of the National Economy, would be best served by such a system since, self-interest being paramount, it would suit those in authority to promote peace and a sense of well-being amongst the general population in order to preserve the political status quo.

  • Comment number 69.

    66. At 10:01am on 10 Feb 2010, JavaMan wrote:

    I Agree WITH ONWARD HO at 22......................God forbid if Goerge Osborne gets in, this man is DANGEROUS!

    I think The Tories will go to the people with he perfect ticket.
    Cameron & Cash I can see it now.
    The woman is a barrister and Oxford educated and can put across complicated ideas to the working man.

    Heres a taster of what we are in for.

    'About just over a year ago I introduced a new project called STEP UP. It has a double meaning. It means that we are giving you a STEP UP and that you STEP UP to take the help.'

    How can they lose ?

  • Comment number 70.


    we are doomed

    Dasterdly Dave on one side and gormless Gordon on the other. If I could see up now I would and go to Australia.

    The UK is finished.

  • Comment number 71.

    69 rvaucbns
    "The woman is a barrister and Oxford educated..."
    When elected, she'll have lots in common with many Labour MPs then ...

  • Comment number 72.

    71. At 11:02am on 10 Feb 2010, vstrad wrote:
    69 rvaucbns
    "The woman is a barrister and Oxford educated..."
    When elected, she'll have lots in common with many Labour MPs then ...

    Isn't it all run by the civil service, so what does it matter?

  • Comment number 73.

    Interesting that Hector Sant "did not need his regulators salary" after a successful career as an investment banker. A real contrast with Mssrs Cameron and Osbourne who despite personal wealth have milked the UK Taxpayer of every penny they were "entitled to" as Honourable Members.

    At the same time no major political figure has ever had a successful career out of politics. Yet it is these very people the UK public have to trust to manage our economy - this despite the fact that they have little evidence in their personal lives of financial prudence.

    Really scary.

  • Comment number 74.

    Yet more pinko Labour Party inspired prpaganda!

  • Comment number 75.

    69 Javaman
    Welcome aboard Onward Airlines !

  • Comment number 76.

    APbbforum wrote:
    The FSA has got it very, very wrong over the last few years but there's nothing to suggest that the BoE would do any better.
    This is correct Sants should have gone earlier.

  • Comment number 77.

    I know both Callum Mccarthy and Hector sants. Let me assure you that I would not let Sants run a tea party. He is the most aloof, condescending, arrogant man I have ever known. He made a ton of money in the city pushing bits of derivatives paper around and then thought that he should "do someting for society" by being a regulator (taking the £485k salary while he did it). When people laud his competence and selflessness, they must ask two questions:
    #1. Why, if he is so competent, did he totally miss the banking crisis?
    2. If he is so selfless, why did he only take the job on at the FSA if he could keep his LTIP at CSFB (which he told me himself)?

  • Comment number 78.

    Ah Bless ! He's got a friend at last.

  • Comment number 79.

    73 DibbySpot
    "At the same time no major political figure has ever had a successful career out of politics. Yet it is these very people the UK public have to trust to manage our economy - this despite the fact that they have little evidence in their personal lives of financial prudence."

    The British electorate likes to vote for younger, articulate show-offs; is easily fooled by newspaper editorials, spin doctors and pressure groups. These people are doubtless intelligent and extremely well-educated. The problem is they have no real experience. But the electorate doesn't want boring, inarticulate people with a track record. They want flashy.

    Even if you got rid of these young, professional politicians, and went for people with experience, you would have a limited choice, though. To run the country properly as an enterprise, you need people who can absorb and analyse information, make rational decisions, and show leadership (rather than oratory). The people that can demonstrate a lifetime of doing these things tend to be: lawyers, accountants, company directors, project managers, and so on. So they are typically middle class, and do not appear to be representative of the workers.

    The trouble is, the current crop, as you point out, don't represent anybody except other, self-opinionated, spoilt children of middle class parents.

    I thought that maybe Margaret Thatcher had worked for a while as a chemist. I checked Wikipedia (blush) and it turns out she did - but for only a brief period. Winston Churchill was a war reporter, I recall, but I don't think that lasted very long. I remember reading about Cromwell. I don't think he got seriously into politics until he was in his 40s, having been a gentleman farmer until then. So he did have real practical experience. But his "reign" was hardly democratic, especially as that was before the days of universal male suffrage.

    Still, we don't really have democracy. We vote for a party representative and behind him/her a clique of party appointees get into power and do what they want.

    But don't just pick on Cameron/Osborne: Brown, Blair, Mandelson, Balls, Cooper, Campbell, Blunkett, etc., etc. are at least as bad - some would say worse.

  • Comment number 80.

    #73 - I think you'll find Vince Cable did pretty well, I'm sure there is a spattering of others accross all parties (please exclude lawyers for me - no wonder there is so much talking, they still think they are billing per 6 minute block). Some Labour are ex NUS, not sure on Conservative selection but I'd imagine plenty have been placed through contacts. Part of me would like to see a quality independent candidate in every seat if If I didn't think it would hand seats to some of the more radical minority parties who somewhat successfully prey on people's fear.

  • Comment number 81.

    63. bill wrote:
    "Getting rid of the FSA would be a good start; getting the Treasury out of the loop would finish the job. Let the BoE run things as it used to, and keep the thieving poiliticians away from the till."

    Spot on "bill". This approach to oversight of the economy was bound to fail. You need one accountable body. Three, as experience has shown means all three passed the buck and were asleep to the dangers of the mid noughties bubble.

  • Comment number 82.

    There seems a body of opinion in agreement with my point raisd earlier that he was Gordon's placeman and he has chosen to jump before he was pushed.

    Those that have worked with him seem to have an even lower opinion of the man thanI hold, difficult as that might appear.

    In 20 years working in the City I have met many people who seem to jump jobs before the proverbial hits the fan Hector is just one of many. Though he appears to have ridden the ride better than most!

    It would appear that as Gordon's placeman sent in to clear up a mess that any competent person could have seen was brewing he has finally been found out.

    I repeat my earlier comment re Gordon's friends not wanting to see out the last days in the Bunker. The question is surely who next?

  • Comment number 83.

    Over the last two years Mr Peston has proved one of the most well-informed journalists on the financial 'beat'. He obviously cultivated some terrific 'sources' for his information, best practice for successful journalists of course.

    Perhaps in this article we can identify one of these 'sources'?

  • Comment number 84.

    A bit late to this, but what twisted reporting. Has Mr. Peston got desires to work for the more sensationalist publications in the near future?

    This has nothing to do with embarrassing the Tories, or any other party. Sants decided to stick to what he said when he took the job, as others have said on here.

    The FSA needs to have a full review of how they operate, & probably closing down & starting again. They have been past-masters at closing stable doors after the proverbial have bolted - if they were regulating successfully how have we had so many massive failures? It's not about learning lessons, I'm afraid, it's about averting crises BEFORE they happen, not sorting out the problems afterwards.

    At the same time as the banks (still) get away with virtually anything, the same FSA is killing the advisory sector (typically smaller businesses) by micro-management & ridiculous bureaucracy - it needs to change quickly, otherwise the banks will be even more powerful.

    Oh, & Mr. Peston - please get back to some balanced reporting, the sensational approach just doesn't work here.

  • Comment number 85.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 86.

    Robert seems TO be joining the same club AS Stephanie Flanders; taking A not very interesting news STORY and sensationalising it WITH lefty spin.

  • Comment number 87.

    I suspect that there was another important factor at play here, but not mentioned by Robert.
    Namely, the presence of Lord Turner as Chairman of the FSA.
    He is not known as a shrinking violet, and he also doesn't appear to be taking a 'non-exec' approach to the FSA role.
    From what I hear and read, the two didn't sit comfortably together at all.
    That, combined with the bashing that regulators have had for the past couple of years (often very well deserved - but probably not in his case - he wasn't there when the worst 'regulator dereliction' was going on), coupled also with the limited earning possibility from the FSA CEO role, were probably the real deciding factors in his decision that 'enough is enough'.

  • Comment number 88.

    You really don't get it Robert. Hector has dedicated his life to a worthless fetishization of money otherwise known as greed. If he wants redemption he can give it all away and ask forgiveness from the pensioners and others he took from.

    Mervyn is an academic and public servant.

    Mervyn has tried to do the right thing for others with his life. Hector hasn't.

    And why are you swallowing the PR.

  • Comment number 89.

    from the FSA website

    'Hector Sants was appointed FSA Chief Executive in July 2007. He joined the FSA in May 2004 as Managing Director, Wholesale and Institutional Markets at the Financial Services Authority. Hector had responsibility for all regulated markets, the related infrastructure such as clearing and settlement, the operation of the UK Listing rules and regulation of firms or groups which conduct primarily wholesale or institutional market business between professionals.'

    Managing Director Whosesale and Institutional Markets!
    What precisely was this chap doing between 2004 and 2007?


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