John Tiner once had a reputation for being the luckiest man in the City. Without a university degree, he worked his way up to the top of accountant Arthur Andersen – and left nine months before it collapsed under the weight of fraud and false accounting at its client Enron.
In April 2001, he joined the FSA to become managing director of consumer, investment and insurance directorate. In September 2003, he became its Chief Executive, while Sir Callum McCarthy became the Chair.
His tenure coincided with a very light-touch regulatory regime. “A lot of the stuff about the [investment] industry being the FSA’s clients and it being there to help came from him,” said one former colleague. He prided himself on his principles-based approach, setting out the framework for regulation rather than imposing detailed rules. “You encourage them to operate fairly and properly in the market, but you don’t tell them how to do it,” he said.
While he might be blamed for the FSA’s failings, this was during a time when the approach was to encourage minimal regulation and break down barriers to doing business, rather than to raise more. Other international regulators were employing an equally light touch regime, so the UK did likewise.
As a result millions of people lost much of their life savings and taxpayers will be propping up the banks for years. He was criticised for the FSA’s poor stewardship of Northern Rock. Chairman Lord Turner told the Treasury select committee it had not been “the function of the regulator to cast questions over the overall business strategy of the institution”.
In July 2007 he quit as chief executive of the Financial Services Authority with praise ringing in his ears, and went to insurance buyout vehicle Resolution.