Jon Pain, a former managing director of Lloyds TSB’s mortgage lender arm Cheltenham & Gloucester, is joining the Financial Services Authority (FSA) at a critical time when high street banks are struggling with falling profits and higher bad debt charges because of the US sub-prime crisis.

Pain's duties includes some of FSA’s most demanding tasks, involving supervising all companies which deal directly with consumers such as all the main high street banks, insurers, building societies and about 17,000 companies involved in providing mortgage advice and insurance broking, Financial Times reports.

Pain replaces Clive Briault, who left the regulator by ‘mutual agreement’ in April and who is said to have shouldered much of the blame for the watchdog's poor supervision of Northern Rock.

The departure of Briault this year came only days before the FSA published a damning internal critique of its failure to adequately to oversee Northern Rock and Pain’s key task will be to help rebuild FSA's credibility.

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