The Guardian, December 2012 – Stephen Gilchrist comments re Hector Sants appointment to Barclays
Former FSA boss Hector Sants joins Barclays as head of compliance
Sants to join after Financial Services Authority gardening leave is over and be responsible for bank's relationship with regulators
Hector Sants is joining a bank that his successor at the FSA said had a 'culture of gaming' regulators. Photograph: Sarah Lee for the Guardian
The former chief City watchdog is joining Barclays bank in a newly created role to overhaul the bank's compliance procedures following the Libor interest rate-rigging scandal and to rebuild its battered relationship with financial regulators.
Hector Sants will join the bank in January as head of compliance, government and regulatory relations after six months' gardening leave from the Financial Services Authority. He will be responsible for the embattled bank's relationship with regulators and a department staffed by 1,300 compliance officers.
Despite his seniority in the past, Sants will not have a seat on the board. Salary details have not been revealed. He is joining a bank that his successor at the FSA, Andrew Bailey, said had a "culture of gaming".
Sants left the FSA in June days before the announcement of the lb290m fine for Libor rigging that led Barclays' chairman Marcus Agius, chief executive Bob Diamond and chief operating officer Jerry del Missier to leave. His appointment to Barclays - the subject of speculation for the past week - has been approved by the FSA, which he joined in 2004 after a career as an investment banker before being promoted to chief executive in the summer of 2007, just as the credit crunch was taking hold.
Sants, who was not involved in setting the level of the Libor fine against Barclays, ended up becoming embroiled in the scandal and had to explain to MPs the events that led to the regulator's approving Diamond's promotion to chief executive two years ago. He wrote to the Treasury select committee, which took evidence from Diamond and others, to say he told Barclays "the relationship with [Diamond] had not reached the level of openness, transparency and willingness to air issues" that the regulator had had with his predecessor, John Varley.
In his new role at Barclays, Sants will not become involved in any of the current FSA investigations such as into the mis-selling of payment protection insurance and interest rate swaps or the inquiry involving finance director Chris Lucas and others into the information disclosed to the market during its life-saving fund-raising with Middle Eastern investors in 2008.
Stephen Gilchrist, head of City legal firm Saunders Law, said: "Appointing Hector Sants as head of compliance is a bit like Mary Queen of Scots appointing her executioner to represent her best interests. Talk about gamekeeper turned poacher."
Privately some questioned how Sants had been able to join a bank so quickly after leaving the FSA. Had he stayed at the watchdog he would have ended up running the new prudential regulation authority, to be set up inside the Bank of England next year, but some MPs had questioned whether he should have joined the new regulator. He had first announced his intention to leave the FSA in February 2010 but by June 2010 George Osborne convinced him to stay on to see through the coalition's break up of the FSA. Sants, who received a salary at the FSA of lb500,000, will report to Antony Jenkins, the internal candidate who succeeded Diamond in September and who is under pressure to produce his plan to change the culture at Barclays.
The bank said Sants' appointment would mean that for the first time "all compliance staff within the bank report to one individual, and operate independently of business and regional management teams".
Jenkins said: "Our people always acting in the right way in all of our interactions will be central to our culture - simply how we do business - but it is important to bolster that with the second line of defence provided by controls and a world class compliance function."
Sants had always said he hoped to take on another job. "Taking on the responsibility of leading Barclays' global compliance function, and overseeing the bank's relationships with governments and regulators, gives me that opportunity," Sants said.