" Arise 'Sir' Hector Sants " - You couldn't make this crap up!

Hector Sants, who was in charge of regulation at the start of the credit crisis, has been knighted. It is in recognition for services to financial regulation.

In granting Sants this honour, George Osborne and David Cameron have finally proved beyond any question that they simply don't understand the terrible damage that the financial sector and the banks in particular, have caused to the financial interests of the ordinary people of these islands.

They cannot seem to make the connection between the dreadful financial damage wrought by the banks on the British economy, and the real suffering this damage has caused to the ordinary men and women of Britain who are watching their livelihoods, their futures, their children's livelihoods and their children's futures being undermined and whittled away by this constant program of austerity, and the repeated refusal to make the financial sector come into line with the real world.

This is the real issue and the true outcome of the financial crisis, where ordinary people's livelihoods are being sacrificed for the continued interests of Britain's ruling elites. The blame for this can be laid firmly at the feet of the British banking sector, who through their arrogance, ignorance and greed * created money they could not underwrite, sold debt and called it investment, and then fixed the tables on which these gambles were taking place so that they always won.

The reason for the cause of this dreadful cancer in the body financial can be laid firmly at the door of a bunch of bumbling amateurish incompetents in the Canary Wharf Palace of Varieties, known more widely as the Financial Services Authority, who have consistently failed to regulate and curtail the activities of the criminal banks. They have the powers to do so, but they do not have the will, and in many cases the competence to achieve their statutory requirements. And the underlying cause of this sheer incompetence lies, and has to lie at the very top of the organisation, in the office of the Chief Executive.

After all, he was the man who, when describing the origins of the financial crisis, 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". This would be to completely ignore the role of the financial regulators in ensuring that the banking activities under their watch were not allowed to get out of hand.

Hector Sants has been Chief Executive of the Fantastically Supine Apologists since 2007, although he had already been a Managing Director of an FSA Division since 2004.

As such he was well placed to know what was happening in the markets and to hear the various rumblings in the undergrowth. He had previously been a successful investment banker with UBS and  later Credit Suisse, so he was obviously a man with significant financial and market experience.

Yet, he was sufficiently unaware of a major crisis building in the market when he took the job as head of the FSA, two months before the collapse of Northern Rock in 2007. This was followed by huge government bailouts for two major leading banks, Royal Bank of Scotland and Lloyds TSB. 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.

During  a subsequent Parliamentary investigation MPs criticised the FSA for its handling of regulation during the credit crunch and accused it of being "asleep at the wheel".

Since then, a vast number of banking scandals arising out of a total failure of regulation have come to light on his watch.

The scandals involving what is inappropriately referred to as mis-selling (it should be called downright institutionalised fraud), have arisen from a banking culture that believes it is still fair game to stuff their clients with unsuitable financial products, and mislead them as to their suitability for their needs!

The FSA were only too well aware that this fraud was widespread in the market but they allowed it to continue. Then there has been the long list of scandals involving wholesale money laundering and sanctions busting carried out by British banks, which again were allowed to carry on under Sants' oversight. Did no-one come to him and say 'Hector, we have a problem', apparently not?

Sir Hector said his 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".

Well, that's alright then! I don't know what lessons have been learned or what changes have been brought about which Sants seems to be so pleased over. All I know is that whatever the scandal, and no matter how big the crime, or  egregious the dishonesty, very, very, few criminals routinely get prosecuted by the FSA for the crimes which are within their limits of responsibilities.

Sir Hector began his City career as a stockbroker at Phillips and Drew, later taking senior positions at the investment banks UBS and Credit Suisse.

While at the FSA, Sir Hector personally warned the then chairman of Barclays, Marcus Agius, that Bob Diamond might not be a suitable choice to become the bank's chief executive in 2010.

He also conveyed the FSA's worries about the bank's culture, including the attitudes of its most senior staff to risk-taking, tax laws and banking regulations.

And what notice did Barclays and their capo di tutti cappi, Roberto Diamante, take of those warnings.

Nada, rien, nix, nil, nul, fucking nothing! That's how much they feared Hector, despite his little warnings about banks being 'afraid' of the FSA!

Earlier this year, the FSA fined Barclays £59.5m for its part in the Libor rate-rigging scandal, after which Mr Diamond left the bank, but it was the Governor of the Bank of England and the Chairman of the FSA who provided the 'encouragement' for Diamond to go!

Sants had planned to leave his role in February 2010, but was convinced by Chancellor George Osborne to stay on to see through the coalition's break-up of the FSA. The real probability is that Osborne couldn't find any other city figure who wanted to have his career blemished by all the egg on the face that would accompany the winding down of the FSA, particularly as it is only in recent months that the real truth about the levels of extreme organised criminality in banking have started to become public. No doubt the offer of a knighthood as a cost of seeing through the changes might have sweetened the pill.

It was earlier thought that Hector might 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 an overhaul in the wake of the financial crisis. Events have turned out rather differently.

Hector unexpectedly resigned earlier this year and has courted more controversy, by joining scandal-hit Barclays from January 2013 to improve the bank's reputation with governments and regulators internationally, where he will become the bank's first point of contact for them. 

Barclays, which had its reputation battered following this summer's LIBOR rate-rigging revelations, needs to do something very urgently to distance itself from its reputation as a mafia family. Maybe they think that the man who didn't know what they were up to when he was head of the regulator which oversaw them is just the man for the job.

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

He will be directly responsible for making sure all its 140,000 staff obey the law in the more than 50 countries where it operates and that it is held in higher esteem by governments and regulators in future!

Well, this should be interesting to watch. He couldn't achieve that outcome when he had responsibility for supervising their activities while head of the FSA, so what odds he will achieve it now? Still, £3 million will help the old life-style a bit! Nothing like getting a taste of modern-day banking rewards to make a chap feel at home from day 1!

The award of this honour is as farcical in its provision as was the award of a knighthood to Fred 'the Shred' Goodwin at RBS.

Both awards demonstrate a degree of contempt for the issuance of awards in general, and for the specific reasons for granting the particular honour.

In Hector's case, it may well be that he is getting his pay-off for seeing through the winding down of the FSA, although some may feel that he had a duty to do that in any event as many of its particular failings occurred under his oversight.

I sense it is even more cynical than that however.

My feeling is that by disposing of this award on Hector, the Government can be observed to be honouring the FSA in general. That is how Hector himself refers to its receipt!

By so doing, the Government is letting it be known that the FSA should not be perceived as the total failure it has become, worse even than the long gone but unlamented Company's Investigation Branch of the DTI!

Cameron and Osborne don't want writers and commentators queuing up to hammer the FSA, declaring it to be a wholesale failure, because that will not reflect well on them. No, better to grant its former CEO a knighthood, and make it look as if everything in the garden was rosy.

The fact that you, me, the City, the Americans and anyone else who has the remotest interest in these issues knows it wasn't, is neither here nor there.

I am deeply angered at this cynical award, because it makes a complete mockery of those people who have received awards and who may perhaps feel that they have done something to achieve them, something of value. Sants is being rewarded for failure, but in the strange la-la land of the Square Mile, it was ever thus!

*Thanks go to Show of Hands for their wonderful song 'Arrogance, Ignorance and Greed'.