After two years of speculation in the financial services sector, it has finally happened. Margaret Cole, Financial Services Authority (FSA) managing director and all-round tough lady, is leaving the regulator after seven years.
Dubbed in 2011 by a finance partner as the ‘most hated woman in the City’, Cole’s legacy at the UK watchdog will forever be entrenched in her recent uncompromising stance against the country’s banking industry. The past five years have seen the FSA hand out a number of jaw-dropping fines and crack a series of insider trading rings.
Cole’s decision to stand down comes just before the regulator is broken up by the coalition government. The move is part of a plan concocted by Chancellor George Osborne, which will see the FSA split into two parts: the supervisory side will be absorbed by the Bank of England, while the enforcement side will be spun into a new agency called the Financial Conduct Authority (FCA).
Speculation within the City is that Cole’s decision to stand down comes after she was overlooked for the top spot at the FCA. ‘She didn’t get the [FCA] job despite the fact that many thought she would,’ says a financial services partner at a City law firm. That post went to Martin Wheatley instead.
Cole, who will remain in her role until the end of March and then take five months of gardening leave, will be a hot commodity once she hits the market. Everyone from the banks to the UK’s largest law firms will be desperate to offer her a job.
While undoubtedly she’ll turn up somewhere in the private sector, the big question is where. Cole’s roots lie within private legal practice. She was an associate at Stephenson Harwood up until 1990, when she made partner. After five years, she jumped ship and went to White & Case, where she made a name for herself as a serious litigator. Most notably she acted for Royal Bank of Canada in a dispute regarding a $500m Enron-related swap transaction.
Financial performance among the Magic Circle has been fairly unspectacular in the last two years.
But is she too much of a big fish now to return to her legal roots? Perhaps salary wise, a string of firms will be fanning their bills in order to charm her onboard. According to the FSA’s 2010/11 annual report, Cole made £263,686 including benefits last year, which pales in comparison with some of the bloated salaries made by City partners.
‘I’d be surprised if she moved back to private practice. She’s relatively young and she’s got a lot of life in her,’ said one impish City partner.
But already the legal market is rife with rumours of where she may end up. Some point towards Allen & Overy, while others declare firmly that she’ll go to a US firm because of salary. Shearman & Sterling, which picked up the Regulatory Team of the Year gong at the Legal Business Awards in February, is already being mooted as a strong contender.
Cole could also go the route of her fellow board member and risk chief Sally Dewar, who is set to join J.P. Morgan in June.
One thing is for certain. Cole’s bargaining power in the City is unparalleled right now and any professional or financial services organisation will be lucky to have her.