Hector Sants, Former FSA Boss Who Presided Over Collapse Of Northern Rock, Awarded Knighthood In Queen's New Year's Honours List

In a move bound to stoke controversy, the man blamed by politicians for the being "asleep at the wheel" in the build up to the collapse of Northern Rock has been awarded a knighthood in the Queen’s New Year’s Honours list.

The Former Financial Services Authority (FSA) chief executive Hector Sants has been recognised for services to financial regulation after overseeing sweeping reforms following the nationalisation of the building society and the bailout of major banks.

While Sants was criticised for the FSA's failure to spot and prevent the credit crunch and subsequent banking meltdown, he has since won praise for cleaning up the regulator and for his role in forcing banks to beef up their balance sheets.

Sir Hector said the award was a "testament to the hard work of everyone at the FSA during the crisis, their willingness to learn lessons and to bring about the changes that were necessary".

The 56-year-old had planned to leave the FSA in February 2010, but was convinced by Chancellor George Osborne, to stay on to see through the coalition's break-up of the FSA.

It was thought he would become a deputy governor of the Bank of England and head the Prudential Regulation Authority (PRA) - one of two new regulatory bodies that will replace the FSA as part of a regulatory overhaul in the wake of the financial crisis.

But Sir Hector unexpectedly resigned earlier this year and has courted more controversy, joining scandal-hit Barclays, where he will become the bank's first point of contact for regulators.

He is believed to be in line for a £3m pay package.

The FSA received a mauling from MPs in the wake of the banking crisis and collapse of Northern Rock.

Northern Rock had to be nationalised in 2008, with the Government also having to bail out Royal Bank of Scotland, Lloyds TSB and HBOS.

In the aftermath of the crisis, Sir Hector warned the City to "be frightened" as he pledged an era of more intrusive and direct regulation.

He also laid the blame at the door of the US and UK governments for their part in the crisis, saying authorities worldwide sought to "encourage a significant credit boom particularly for the benefit of consumers who wished to purchase housing".

Sir Hector joined the FSA wholesale markets arm from Credit Suisse in 2004. He became chief executive in 2007 - just two months before the run on Northern Rock.

He started his career at stockbroker Phillips & Drew, before a stint at Swiss bank UBS where he became head of equities and vice chairman.

He joined Credit Suisse in the same role in 2000, before becoming chief executive of Credit Suisse First Boston in 2001.

It had been widely expected that Sir Hector would return to the private sector when he resigned from the FSA earlier this year.

Barclays, which has had its reputation battered following this summer's rate-rigging revelations, has appointed Sir Hector to the newly-created role of head of compliance and he is due to take on the role on January 21.

It is believed he will also play a central role in rewriting the bank's pay and bonus strategy.

Sir Hector is married with three children.

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