Hector Sants, chief executive of the FSA, is warming to suggestions he could become deputy governor at the Bank of England under a Tory Government.
Sants had reportedly been hostile to Conservative plans to merge the FSA with the Bank of England should they gain power.
But he is now understood to be attracted by the prospect of having a profound influence on the creation of the new financial regulator, according to the Financial Times today.
Under Tory plans the FSA would be absorbed into and supervised by the Bank of England, with regulation of bank and broker moved into a newly created consumer agency.
Sants had criticised the plans, and of the Conservatives for going public with the idea during the summer amid the financial crisis.
Mr Sants said on Monday: "I strongly believe that dividing responsibility for enforcement activity would invite a fragmentation of approaches and a 'turf war' between the different bodies involved . . . Now is not the time therefore to be diverting resources to looking at 'structural questions'."
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