Martin Wheatley, chief executive of the Financial Conduct Authority (FCA), UK financial regulator, is to quit effective 12 September.

Chancellor George Osborne said a different leadership is required to develop the organisation.

As anticipated by Financial Times earlier in July, the result of the May election, with a Tory government and Osborne announcing a new settlement for the City, could have put Wheatley in a difficult position.

A former regulator told Financial Times that the May election have left Wheatley "on the wrong side of the argument" as he "has nailed his colours too resolutely to consumer protection".

The Financial Times article refers to Wheatley as a "tormentor-in-chief for the industry" following the penalties imposed on the Libor scandal and the outcome of other regulatory affairs.

FCA chairman John Griffith-Jones, former KPMG UK CEO, said Tracey McDermott will replace Wheatley, until a permanent CEO is hired.

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Michael Izza, CEO of the Institute of Chartered Accountants in England and Wales (ICAEW), commended Wheatley for his strong ethics.

"Martin understood from the beginning that embedding ethics and integrity in banking culture was the only way the sector could begin to regain the confidence not just of the markets but also of society as a whole."

But he also said: "However, the financial services industry also needs to be seen to be leading the way on improving its working culture, rather than relying on regulators or the law to do it for them."

According to the FCA Wheatley will act as an adviser to the FCA board until January 31 2016, particularly to implement the findings of the Fair and Effective Markets Review, an assessment of the way wholesale financial markets operate, which he co-chaired.