Search for City watchdog head after Wheatley quits

George Osborne says the next FCA boss will move on to the next stage. Picture: PA

Although Wheatley has resigned from his post, his departure was widely seen as being an ousting by the UK Treasury.

It is understood Wheatley was told he would not be asked to stay on when his contract came up for renewal in March 2016. Wheatley, who was paid a total of £701,000 including bonuses last year, will leave in September.

Chancellor George Osborne said Wheatley had done a “brilliant job” as chief executive in launching the FCA, but that the regulator was now in need of “different leadership”.

Executive board member Tracey McDermott will take on the role of acting chief executive while the UK government launches a “worldwide search” for a permanent replacement. “Britain needs a tough, strong financial conduct regulator. Martin Wheatley has done a brilliant job of launching the FCA in tough circumstances,” Osborne said.

“Now that phase is complete, the government believes that different leadership is required to build on those foundations and take the organisation to the next stage of its development.

“The government is launching a worldwide search. Martin’s replacement will – like him – need to be passionate about protecting consumers, promoting competition and completing the job of cleaning up the City, so it is the best-regulated market in the world.”

Which? executive director, Richard Lloyd, said it had strongly supported the “transformation of the financial regulator from lapdog to watchdog” under Wheatley’s leadership.

“The new chief executive must be determined to improve consumer protection and competition in financial services, and to continue with the much needed clean-up of our failed banking system.

“Ensuring the independence of the FCA is crucial for consumer confidence,” he said.

Wheatley said in a statement that he was “incredibly proud of all we have achieved together in building the FCA”.

He added: “I know that the organisation will build on that strong start and work so that the financial services industry continues to thrive.”

Wheatley had launched the FCA with a pledge to “shoot first and ask questions later” in his drive to clean up the City.

However he came under fire himself last year after the leak of an impending FCA investigation led to billions being wiped off the value of insurance companies.

He was one of four executives to be stripped of his entire bonus and earned a dressing down from Osborne who said the incident had damaged the UK’s reputation for regulatory stability and competence.

Andrew Tyrie MP, chairman of the Treasury committee, said Wheatley had taken on the role at an exceptionally difficult time.

“He was faced with the challenge of changing the culture of both the regulated community and the regulator, given the exposure by the crisis of the shortcomings of the FSA.

“With the interests of millions of consumers to protect, tens of thousands of firms to regulate and the need to secure more competition in the financial services sector, it will be essential to find a high quality successor.”

Wheatley has been the chief executive since the FCA was created in 2013. His interim replacement McDermott was promoted to director of supervision at the regulator last year.