In an interview with the BBC, Darling warned banks that their profits must go towards capital buffers and not over-excessive remuneration.
He said: “The key thing that we have to get across to bankers is that, for them, the party has to be over.”
Darling reiterated the sentiments of FSA chairman Lord Turner, who said in his Mansion House speech that the economic crisis was cooked up on trading floors by bankers who did not understand the complicated products they were trading.
He said: “It was hardly surprising that there was an almighty car crash.”
The Chancellor, who was talking to the BBC before he left for the G20 conference in Pittsburgh, said that the key to moving forward was to create a robust regulatory system to root out any future abuses of financial excess.
He said: “Most banks need to build up capital and build up buffers for the future and should not be paying out dividends and large bonuses. Let’s make sure that the FSA and the other regulators get into the banks and says ‘you have to stop these practices and we’ll make sure you do’.”