Financial wrongdoers could face significantly higher fines from the City watchdog under proposals it is due to put forward this summer.

Hector Sants, chief executive of the Financial Services Authority, last night told City lawyers that the regulator was considering a 'new framework' for the penalties it imposed, which would include higher fines.

'The rationale for this is a perception that financial penalties have not been sufficiently large to deter wrongdoing in large institutions,' he told the Financial Services Lawyers Association.

The lawyers, many of whom follow the FSA’s deliberations closely, expressed surprise at the announcement.

Financial Times