UK financial regulator resigns after contract not renewed

‘Shoot-first’ Wheatley perceived to be too tough on banks as economy grows

Martin Wheatley: led the authority from its inception in April 2013. Photograph: Getty Images

Martin Wheatley: led the authority from its inception in April 2013. Photograph: Getty Images

 

Martin Wheatley, the chief executive of the UK financial regulator who led a post-crisis crackdown on errant banks, has resigned after being told by chancellor of the exchequer George Osborne that his contract would not be renewed when it expires next March.

Government insiders say the message was relayed to Mr Wheatley “relatively recently”. The Financial Conduct Authority chief then decided he did not want to serve out the remainder of his term.

He will step down on September 12th, with Tracey McDermott, the regulator’s head of supervision, taking over until a replacement is found.

The move comes a month after Mr Osborne unveiled a “new settlement” with the City, which suggests a shift from a period of tough regulation of financial services.

Mr Wheatley, formerly the head of Hong Kong’s Securities and Futures Commission, led the FCA from its inception in April 2013.

He oversaw a regulator that extracted record penalties from the industry, teaming with US authorities on the Libor and foreign exchange benchmark-rigging scandals.

Mis-selling products

However, Mr Wheatley did not always have the confidence of government officials, who have privately urged regulators to take a lighter approach as the economy improves and banker-bashing falls out of favour. Some industry executives viewed him as remote and unhelpful and complained to senior Conservative politicians about his consumer-champion agenda.

Shoot first

One senior UK bank director said: “The problem with Martin was that he made so many enemies, partly for good reason, because banks did need firm treatment after the crisis. But he seemed to have a mindset that all bankers are evil.”

Mr Osborne’s official statement praised Mr Wheatley’s performance but said the government believed “different leadership is required” to build on the FCA’s foundations.

A big factor in Mr Osborne’s decision is thought to be the criticism of Mr Wheatley that followed the FCA’s release of market-sensitive information in a botched 2013 press briefing on a life assurance market review.

– (Copyright The Financial Times Limited 2015)