Financial services companies should be "frightened" of a reinvigorated regulator, it has been claimed.
Speaking to business leaders in the City, Hector Sants, chief executive of the Financial Services Authority (FSA), warned that the recent crisis in the sector means it will be focusing more on business plans and the risks inherent in them.
"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," he said.
However, Mr Sants also warned that too much interference from regulators could damage the sector and prevent economic growth.
Last week, a study by KPMG revealed that the UK's largest banks still have some strong business sectors, despite their recent high-profile problems.
The study also predicted that while the recession could lead to a fall in the number of institutions, the remaining banks will be stronger than their predecessors.
