FCA chief executive Martin Wheatley to stand down

The head of the Financial Conduct Authority (FCA), Martin Wheatley, is to stand down from his post after just two years in charge.

He will leave the City regulator in September, the FCA announced.

Chancellor George Osborne thanked Mr Wheatley for his service, adding he had done "a brilliant job of launching the FCA in tough circumstances".

He added: "The government believes that different leadership is required to build on those foundations."

Mr Wheatley will be replaced on an interim basis by his deputy, Tracey McDermott, while a search for his successor is launched.

He said he was "incredibly proud" of what he and his team had achieved together in building the FCA over the last four years. "I know that the organisation will build on that strong start and work so that the financial services industry continues to thrive."

Analysis: Kamal Ahmed, BBC business editor:

Make no bones about it, the Treasury was behind Martin Wheatley's surprise decision to stand down as the head of the Financial Conduct Authority.

I am told that discussions were held with the head of the FCA in recent weeks where it was made clear that the Chancellor would not be asking Mr Wheatley to stay on when his contract came up for renewal in March 2016.

With that sword hanging over his head, Mr Wheatley decided that he would go early.

The Treasury has always had a scratchy relationship with Mr Wheatley who famously said he would "shoot first" and ask questions later when he came across wrong doing in the financial services sector.

The banking industry didn't much like such a gung-ho attitude and Mr Wheatley was often the subject of poisonous comments from senior banking executives.

Read Kamal's blog in full

Andrew Tyrie, chairman of the Treasury Committee, thanked Mr Wheatley for his work.

He added: "Martin took over at an exceptionally difficult time. He was faced with the challenge of changing the culture of both the regulated community and the regulator, given the exposure by the crisis of the shortcomings of the FSA.

"With the interests of millions of consumers to protect, tens of thousands of firms to regulate and the need to secure more competition in the financial services sector, it will be essential to find a high quality successor."

Mr Wheatley joined the forerunner to the FCA, the Financial Services Authority (FSA), in September 2011 before moving on to take over from Hector Sants as chief executive of the newly beefed up City regulator, which launched in April 2013.

City scalps

Mr Wheatley made a reputation as a tough regulator in a number of markets including Hong Kong and also at the Securities and Exchanges Commission in the US.

It was understood at the time that it was for these reasons that he was appointed to the role of chief executive of the FCA.

In the past month, Mr Wheatley has repeatedly tried to reassure City grandees that the regulator was not attempting to put "heads on sticks" nor hunting for scalps under new rules designed to increase accountability in the banking sector.

But the FCA has also handed out some of the biggest regulatory fines seen in the City.

The regulator, however, has not been scandal free, running into trouble with the insurance industry last year when a story, leaked to the Daily Telegraph, warned the regulator was planning an investigation of 30 million pension policies, some of which had been sold as long ago as the 1970s.

Billions of pounds were wiped off the share prices of big insurance companies, prompting a parliamentary inquiry and four senior executives, including Mr Wheatley, lost their annual bonuses.