Hector Sants has warned London's position as a global financial Centre is under threat due to the UK financial sector not rethinking its business models quickly enough in the face of political upheaval and regulatory change.
In an interview with the Financial Times the outgoing Financial Services Authority (FSA) chief executive warned bankers, brokers and insurers all need "radical re-engineering" over the next five years.
He said changes in savings patterns, the shift of growth to the developing world and tougher regulation would all have an impact on financial services businesses.
Sants said: "I don't think management have fully appreciated the need to change. They are thinking they can adjust be tweaking and modifying," he told the FT.
"As a major cross border financial centre, you would hope that the UK would be at the forefront of innovation and it's not happening to the degree that it should."
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