Senior executives at troubled banks have been targeted by the City watchdog for close scrutiny over the decisions they made in the run-up to the crisis, the chief executive of the Financial Services Authority warned yesterday as he unveiled a tough new approach to regulation.
Abandoning the principles-based approach to financial regulation that the FSA championed before the crisis, Hector Sants outlined a more interventionist policy, warning that people should be 'very frightened' of the City watchdog.
Sants said the regulator would look into the role played by the senior management of institutions that had failed. He declined to name specific companies. But his comments would appear to be aimed at executives of HBOS and Royal Bank of Scotland, the banks that are under effective government control after suffering heavy losses.