Speaking at a Treasury select committee evidence session on Tuesday, Turner said there is a danger that positive signs in the economy will lead to regulators “drawing back” on the degree of radicalism needed to prevent a future global economic crisis.
Turner said: “I think there is a real danger that we do not seize the opportunity of this crisis to make sure that we make changes radical enough to ensure we are not sitting here in 10 or 15 years time.
“We need to draw breath and think about it and make sure we do not get satisfied with what we have done so far.”
Turner also fleshed out his idea of forming a joint committee between the Bank of England and the FSA that would oversee the financial stability of institutions, saying he would like BoE governor Mervyn King to chair the committee.
“I think it should probably have a majority from the bank’s staff – maybe if it had nine people there would be five from the bank and four from the FSA.”
Turner said a joint committee was the best way of balancing the powers between the FSA and the Bank of England.
He said that if all the power rested with the BoE, the FSA would still get blamed when an institution failed, even though it would not have the power to prevent it.
He added this was a result of the air of “mystery” and “majesty” attached to the bank.