Early departure leaves UK regulator with a sense of 'unfinished business'

By Huw Jones LONDON (Reuters) - Martin Wheatley, the chief executive of Britain's Financial Conduct Authority, said his early departure from his job leaves him with a sense of unfinished business. Wheatley's comments are his first public response to British finance minister George Osborne's decision not to extend his contract, which led to his decision last Friday to go before his term expires next March. "I am disappointed to be moving on and I do so with a sense of unfinished business," Wheatley told reporters after taking part in his last FCA annual meeting. Osborne has called for a "new settlement" with banks, which have faced a welter of new rules since the financial crisis. Osborne has announced plans to ease a levy on their balance sheets and given regulators an extra remit to ensure Britain stays an attractive place for global financial firms to do business. Under Wheatley, the FCA has developed a reputation as a hardline regulator, imposing record fines on banks for misdemeanours in retail banking and financial markets. Wheatley described this as a seismic shift in the relationship between firms and their customers. "I think that seismic shift has happened and I hope it stays that way," he said. Bank boards are now aware that good conduct is essential for winning back trust in markets, Wheatley said. "There is still work to be done but I am more convinced than ever that conduct is at the top of firms' agenda. It's no longer an afterthought." Unfinished business included implementing recommendations to clean up currency markets after several banks were fined for rigging them, he said. New rules, due to come in next year, to make senior managers at banks directly accountable for their actions had been a tough challenge, Wheatley said. He faced some criticism at the annual meeting, which is open to the public, that the FCA had not been tough enough. Michael Mason-Mahon, a member of the public present at the meeting, said Wheatley was "the worst joke that has ever happened in the financial sector" by not getting rid of directors at banks that have been fined for misconduct. Despite Osborne's change of tone towards the financial sector, FCA chairman John Griffith-Jones said the watchdog's objectives, which include protecting consumers and keeping markets orderly, had not changed. "I am not particularly worried that we are going to find ourselves in difficulty," Griffith-Jones told reporters. He said he had every intention of presiding over next year's annual meeting. Griffith-Jones said the FCA was conducting its second review of its board's effectiveness. Like the Bank of England, the watchdog's senior officials would also adopt personal accountability rules similar to the banks, he said. (Reporting by Huw Jones. Editing by Jane Merriman)