The Financial Services Authority (FSA) today announced that Hector Sants will leave the organisation in the summer of 2010, after three years as chief executive officer (CEO).

Mr Sants said: "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. Of course, those three years have encompassed the most extraordinary circumstances for a financial regulator, and I am very proud of the manner in which the FSA rose to the challenge of dealing with such unprecedented turbulence across global financial markets. Moreover, 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.

"The success of any regulatory structure depends on ensuring supervision is carried out by high-quality supervisors with sufficient resources and specialist support.

"I believe the FSA has made great strides in ensuring that such individuals are in place in the UK and I am sure that after I leave they will continue to do invaluable work to ensure financial stability and protect the interests of consumers."

Adair Turner, chairman of the FSA said: "Hector has given outstanding service and leadership through the turbulent last three years and has played a pivotal role in reforming the FSA into a truly effective organisation. He will leave behind an organisation with strong purpose and a clear strategy. We will be immensely sorry to lose him, but understand his decision to move on in the summer and wish him well in whatever he chooses to do after his departure. In the meantime, we will continue to work together to deliver the FSA's reformed and intensive supervisory approach and drive forward the global regulatory reform agenda."

Commenting on the news, Jonathan Davies, regulatory partner at City law firm Reynolds Porter Chamberlain LLP (RPC), said: "Taken with the Conservative Party threat to break up the FSA, Hector Sants' resignation risks the regulator being viewed as a lame duck."

"The head of the FSA is appointed by the Treasury and with a general election looming it would make sense for Hector's replacement to be agreed amongst the main political parties - the problem is that they all seem at odds over what the role of the FSA should be. But no one will take on the role of Chief Executive without a clear definition of what the job entails."

"This is not the environment in which the future of the insurance sector can be left hanging in the balance for months, it risks sowing too much confusion. The insurance industry needs a period of regulatory stability and this isn't going to help."

The board of the FSA has said it will announce the process for deciding the succession to Hector Sants in due course.

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