Hector Sants to step down in the summer

Sants said that he told the board that he planned to serve as CEO for three years, and he intended to stick to that timetable.

He added: "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."

Adair Turner, chairman of the FSA, said Sants had provided outstanding service and leadership through the turbulent last three years and played a pivotal role in reforming the FSA into an effective organisation.

He added: "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."

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

Sants joined the regulator in May 2004 as managing director of wholesale and institutional markets. He leaves the FSA amid uncertainty about the future of the organisation and speculation that the Conservatives want him to become a deputy governor of the Bank of England if they are elected.

Vince Cable, Liberal Democrat Shadow Chancellor, said the resignation will plunge the FSA into a great deal of uncertainty.

He added: "We are still in the middle of a crisis and the FSA has an important part to play in effecting far reaching and lasting change. We do not know if this decision is a direct result of the Tories' stance on the FSA's future but what we can say is that their proposals are creating uncertainty for an organisation that has a vital role to play."