Outgoing FSA chief executive Hector Sants has used his last speech at the regulator to call for greater individual accountability at financial services firms and for senior management to be hit with tougher penalties.
Speaking this week at Merchant Taylors’ Hall in London, Sants said firms should be encouraged to place more emphasis on treating customers fairly when assessing an individual’s pay.
Sants said the Government and the FSA are “committed to a discussion paper on the governance of individual accountability for decision-making”.
He also argued if someone is on the board of a bank that fails, they should not be allowed to carry out that role in future.
Sants said: “It is important regulators operate a credible enforcement regime for individual wrongdoing, particularly in the conduct area. In this area, much progress has been made to ensure the regulatory regime is seen as providing effective deterrence. However, I believe it is vital that penalties are raised above the current level so that momentum in this area is maintained.”
Sants said he has previously described the relationship between the regulator and the regulated as a “partnership” but that it instead should be a relationship of “constructive tension”. He noted that one of the “major themes” across his speeches was that people should be “very frightened” of the FSA.
Law firm CMS Cameron McKenna partner Simon Morris says: “It is a shame Sants ended his last-ever speech on the jarring note that people should be very frightened of the FSA. That is quite wrong. The new regulators should command respect through informed dialogue and rational decisions.”
Yellowtail Financial Planning managing director Dennis Hall says: “Sants’ words are all well and good but what about the accountability of the FSA and the Government?”