Speaking at the ABI biennial conference in London today, Kane said: “We have to improve the relationship between the regulator and those they regulate. There are going to be changes in the ways firms are supervised and that is rightly so.
“But I sincerely hope that the nature and culture of the relationship between the regulator and firms can develop into one of maturity. I know the FSA is under pressure to show its teeth but I believe this relationship should be an adult one.
“There is a real danger in the current environment of supervision turning into a parent child relationship resulting in individual supervisors and individual firms feeling unable to make their own judgements based on experience and knowledge.
He added: “This is a difficult subject and will require real skill and judgement to get it right. It will require a higher calibre of supervisors at the FSA who understand the businesses they are supervising and work together with firms to achieve a positive outcome.”