The man tasked with regulating the City of London in the run-up to the near-collapse of the British banking system has been knighted in the UK’s new year Honours.
Former Financial Services Authority (FSA) chief executive Hector Sants has been recognised for services to financial regulation after overseeing sweeping reforms following the nationalisation of Northern Rock and bailout of major banks.
However, the knighthood will be seen as a controversial decision, as it was Sants who led the organisation accused by MPs of being “asleep at the wheel” in the run-up to the collapse of Northern Rock.
While he was criticised for the FSA’s failure to spot and prevent the credit crunch and banking meltdown, he has since won praise for cleaning up the regulator and for his role in forcing banks to beef up their balance sheets.
Sants said the award was a “testament to the hard work of everyone at the FSA during the crisis, their willingness to learn lessons and to bring about the changes that were necessary”.
The 56-year-old had planned to leave the FSA in Feb 2010 but was convinced by Chancellor George Osborne to stay on to see through the coalition’s break-up of the FSA. The FSA received a mauling from MPs in the wake of the banking crisis.
It was thought he would become a deputy governor of the Bank of England and head the Prudential Regulation Authority — one of two new regulatory bodies that will replace the FSA as part of a regulatory overhaul in the wake of the financial crisis.
However, Sants unexpectedly resigned earlier this year and has courted more controversy, joining scandal-hit Barclays, where he will become the bank’s first point of contact for regulators.
He is believed to be in line for a £3m (€3.7m) pay package.
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