Hector Sants, the chief executive of the Financial Services Authority, has announced he is to step down as head of the City regulator. Sants, who oversaw an overhaul of banking regulation, saying banks "should be very frightened" of the regulator, has been with the FSA since 2004 when he joined from investment bank Credit Suisse First Boston.

Mr Sants said he would leave in the summer, as planned, after a three year period he described as "extraordinary circumstances" for the FSA, which has faced criticism for failing to adequately control banks' risk-taking.

In a statement Mr Sants said: "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."