Lloyds TSB, fined recently by the Financial Services Authority (FSA) for mis-selling investment products to retail investors, has responded by hiring the UK financial watchdog's top risk regulator.Carol Sergeant, until Wednesday the managing director of the FSA’s regulatory process and risks directorate, will take on a newly created post of chief risk director when she joins in February. Sergeant will also sit on the UK bank’s group executive directors committee, which reports directly to Lloyds TSB chief executive Eric Daniels.
The move comes a month after the FSA fined the bank a record £1.9 million, and ordered it to pay £98 million in compensation, for mis-selling precipice bonds through its Scottish Widows insurance arm.
Sergeant’s appointment represents “a much enhanced focus on risk” by Lloyds TSB chief Daniels, said a bank spokeswoman. She added that Sergeant would represent a powerful central risk management figurehead at the bank, which has traditionally managed risk at a business-line level.
Earlier this year Sergeant missed out on the chance of becoming chief executive of FSA, the job instead going to John Tiner, another managing director at the regulator. But Sergeant has publicly denied this was her reason for leaving, according to media reports.
Before joining the FSA, Sergeant worked at the Bank of England, where she rose to become head of major UK banks supervision.
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