A former regulator is joining Royal Bank of Scotland in a newly created role overseeing regulatory affairs and conduct as part of the effort by the bailed out bank to clean up its reputation in the wake of the Libor rigging scandal.
Jon Pain, who was at the Financial Services Authority for four years until 2011, is joining the bank in August as head of conduct and regulatory affairs. He will become one of the most senior executives at the bank, joining the executive committee (just below board level) and potentially earning millions of pounds a year.
Stephen Hester, the RBS chief executive, said: "The creation of this position sends a clear message about how we want to do business – serving customers well, completing our return to a safe and conservative risk profile, and generating sustainable returns for shareholders.
"If we achieve these objectives, and do so in the right way, RBS will become a really good bank." Hester is keen to oversee the privatisation of RBS, possibly next year.
Pain is joining from accountants KPMG where he was partner for financial services after leaving the FSA as a managing director of supervision in 2011. Before that he had worked for Lloyds from 1973 until 2008.
Pain is among a number of officials who left the FSA before it was carved up in April to become the Financial Conduct Authority overseeing most elements of City behaviour, allowing the new Prudential Regulation Authority to regulate the biggest banks.
His appointment comes in the wake of big banks are facing damage to their reputations from mis-selling scandals and penalties for bad behaviour, such as the £390m fine RBS received for rigging Libor.
Barclays recruited the former FSA boss Hector Sants into a top role overseeing regulation at the start of the year while HSBC has also made changes to its compliance and regulation divisions since it was fined a record £1.2bn for money laundering by US authorities.
Pain's appointment is the latest in a string of management changes by Hester as a result of the decision to move finance director Bruce van Saun to run the US operation Citizens ahead of its partial stock market flotation next year. Van Saun is being replaced by head of risk Nathan Bostock.
In 2010 when Sants had quit the FSA – before changing his mind and then finally quitting last year – Pain had reportedly been expecting to have replace him, on an interim basis.
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