McDermott pulls out of race to run City watchdog

The search for a permanent boss of the Financial Conduct Authority is expected to take a little longer after the chancellor confirmed the current interim chief executive did not want the job.

Tracey McDermott later confirmed she had withdrawn from the recruitment process.

It leaves the race for the top City regulator's job wide open.

Former FCA boss Martin Wheatley left the organisation in September.

Since then, the chancellor has reportedly struggled to find a suitable candidate willing to fill the role.

George Osborne told BBC Radio 4's Today programme: "[The FCA] needs new leadership to take it into its more mature phase. We are looking for the best candidate. To be fair, there's a very effective interim leader in Tracey McDermott, but she doesn't want the job full-time."

Ms McDermott confirmed in a statement that she had interviewed for the role on a permanent basis after taking over as interim chief executive in September.

In a statement released by the FCA, she said: "I have been at the FSA/FCA for 15 years and I remain extremely committed to, and passionate about, the important work we do. It has been, and remains, a privilege to lead this organisation.

"However, going through the recruitment process has made me reflect on what I want to do with the rest of my career.

"As a result, I have decided that this is not the right job for me at this stage of my career. This was a decision taken after many months of careful thought and was not one that I took lightly. "

Since Mr Wheatley was ousted as FCA boss by the chancellor in the summer, the regulator has proposed a time limit be set on payment protection insurance (PPI) compensation claims and signalled a lighter touch approach to its regulation of the City.

Mr Wheatley was originally hired as boss of the FCA because of his reputation as a tough global financial regulator.

But his habit of straight talking led to accusations of banker-bashing by City grandees.

Since his departure from the regulator, a major investigation into banking culture, pay and practices, was dropped.

The decision to ditch the investigation into banking culture, pay and practices was not received well by MP's when it was announced last month, with the chairman of the Treasury Select Committee Andrew Tyrie calling Ms McDermott and her colleagues before his committee on 20 January.

Mark Garnier MP, a Conservative member of the Treasury Select Committee, said he was "disappointed" by the decision.

And the FCA was later forced to deny the Treasury had been involved in the decision to drop the banking inquiry.

It added that a focus on the culture in financial services firms remained a priority, saying: "We have decided that the best way to support these efforts is to engage individually with firms to encourage their delivery of cultural change, as well as supporting the other initiatives outside the FCA."