FSA chairman Adair Turner may ask the government for the power to block hostile buyouts in the banking sector in a bid to prevent aggressive acquisitions from disrupting financial stability.
He told a newswire "aggressive, contested" takeovers do not allow for as much due diligence as agreed takeovers.
This may be a reasonable risk in the non-banking sector but not in the financial sector, he said.
"Whereas you can see the primary responsibility of the board of directors of a non-banking company being to maximize shareholder value and to take risks, the fact is that for banks the downside to a society of getting it wrong is a hugely important factor," Turner said last night.
Following public pressure, the FSA will publish a synthesis report by April on its investigation into Royal Bank of Scotland Group (RBS) and the events that led to its near collapse.
RBS, which reported the U.K.'s largest-ever net loss of £28bn in 2008, executed an ill-timed hostile takeover of ABN Amro in late 2007.
He said when he writes the report on RBS he may recommend to the government that it passes legislation allowing the FSA to refuse aggressive takeovers.
The FSA originally closed its investigation without releasing its findings, other than to say it would not bring an enforcement case against RBS or its former directors.
But last night Turner said: "Already we know that faced with an RBS proposing to buy an ABN Amro today we would probably take steps to stop it."
"It is true to say that philosophically back in 2007 we didn't think it was our role as a regulator, but I think maybe we've changed."
The FSA can already effectively prevent takeovers by demanding high levels of capital.
In May, the FSA raised concerns over the capital of Prudential, leading the firm to delay a rights issue for the planned friendly takeover of AIG's Asian life-insurance business. That deal later fell through.
Turner also called for tougher European bank stress tests in 2011 after the disappointment of the 2010's, which did not identify the possibility of the enormous recapitalization of Irish banks.
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