London investment bankers complain about regulation the way they do the English weather. But lately, the grumbling has grown louder. The Financial Services Practitioner Panel, the securities industry lobbying group that advises the U.K.'s Financial Services Authority, has warned the FSA that the costs of increased regulation could damage British competitiveness. So City gents reacted enthusiastically last month when one of their own -- Credit Suisse First Boston’s Hector Sants -- was named the FSA’s chief regulator for wholesale markets.
Finding foxes to guard City chicken coops is apparently not that easy. The 48-year-old Sants, a former member of the Practitioner Panel, is the first top-notch banker that the FSA has managed to recruit for regulatory duty since the agency was created seven years ago. He has extensive market experience: Before becoming European CEO of CSFB in 2000 after the firm’s parent, Credit Suisse, acquired Donaldson, Lufkin & Jenrette, Sants ran global equities at DLJ and, before that, at UBS Warburg. He has a long-standing interest in regulatory issues, having served on the boards of the London Stock Exchange and one of the FSA’s predecessors, the Securities and Futures Authority.
In May, Sants becomes one of three managing directors of a revamped FSA; Clive Briault and David Kenmir are being promoted from within to oversee retail markets and regulatory services, respectively. The FSA agenda is full: Later this year the authority will implement new disclosure requirements on analyst conflicts and brokerage commissions, then turn its attention to the European Investment Services Directive and other single-market rules.
Sants’ old colleagues in the City expect him to apply a light touch to institutional markets. “He really understands the difference between wholesale markets and retail markets,” says John Serocold, a director of the London Investment Banking Association.
“I’ve been in investment banking for 27 years,” says Sants, who studied psychology and philosophy at Oxford. “I would genuinely like to have the opportunity to give something back.” Starting with money: Although Sants will draw handsome remuneration for a regulator -- about £300,000 ($553,000) -- that’s pocket change by the standards of a senior City banker.
