Davies to do extra-time at FSA

SIR Howard Davies, who was expected to stand down from his position as chairman of the Financial Services Authority at the end of July, has agreed to extend his term of office for a further 18 months, it was being announced in Parliament this afternoon. Sir Howard, 51, who was reluctant to be reappointed for a full second term, will now leave the FSA on 31 January 2004.

He has agreed to the extension because he feels there is still a lot of work to be done in bedding down the FSA, given that it only received its full legal powers just before Christmas. He feels it is important to provide continuity of leadership at this stage in the organisation's life.

The FSA is preparing to extend its regulatory oversight to mortgages and general insurance, both areas that will involve a significant additional amount of work and both of which are due to come on stream in 2004.

Sir Howard is also conscious that there is unfinished business in the Equitable Life affair with some still-to- be-published inquiries into the problems at the insurance group and the role of the regulator.

Sir Howard had been linked with the chairmanship of the BBC, now held by Sir Gavyn Davies. He remains a possible successor to Bank of England Governor Sir Edward George, and has most recently been linked with proposals to split the role of Cabinet Secretary that is currently held by Sir Richard Wilson.

Welcoming his reappointment, Chancellor Gordon Brown said Sir Howard's experience would be invaluable in taking the FSA forward.