Hector Sants, the chief executive of the Financial Services Authority, has warned the banking sector that the regulator will respond quickly and decisively to future transgressions.
Mr Sants said that while the FSA will continue to operate as ‘an evidence-based and risk-based regime’, but a tougher stance is required to ensure that consumers are protected.
Mr Sants added: ‘A principles-based approach does not work with individuals who have no principles.’
The FSA has come under intense criticism from financial commentators and the media in recent months for failing to reign in the City during the boom years.
While conceding that a more gung-ho approach may lead to errors in judgement, Mr Sants justified the harder line, telling bankers: ‘There is a view that people are not frightened of the FSA. I can assure you that this is a view I am determined to correct. People should be very frightened of the FSA.’
Dominic Lindley, principal policy advisor at Which? said: ‘We hope that this speech marks an end of the cosy relationship the FSA has had with the financial services industry. The rhetoric needs to be backed with tough action against firms which are not treating their customers fairly. Consumers need more effective enforcement, higher fines and greater use of naming and shaming.’
Latest money news
For daily consumer news, subscribe to the here.
Or sign up for our monthly money podcast.
If you have an older web browser you may need to copy and paste this link into your newsreader: https://www.which.co.uk/feeds/reviews/news.xml . Find out more about RSS in the Which? guide to news feeds.