Martin Wheatley, the chief executive of the Financial Conduct Authority (FCA), has said he wants the regulator's legacy to reflect that it ensured wrongdoers "faced the full consequences" of their actions.
Speaking at a Treasury Committee hearing on Tuesday, Wheatley said he wanted the regulator to be seen as tough and, in a clear warning to the city, said it would continue to dish out heavy fines for misconduct where merited.
This is despite remarks from FCA chairman John Griffith-Jones, who said he did not want the organisation to be measured by the size of the fines it levies.
The FCA handed out fines worth more than £400m last year.
Wheatley said: "Where there is clear misconduct, we want [offenders] to face the full consequences, and yes we do want that to be a legacy."
In March, Wheatley said he wanted to set a different tone to Hector Sants - as the former chief executive of the FSA, Sants was effectively Wheatley's predecessor - who had previously warned the City to "be afraid" of the FSA.
In front of the Treasury Committee, Wheatley said the FCA's new approach of effectively clawing back fines from executives' bonuses rather than from shareholders meant they were having a bigger impact on firms and their behaviour. "If employees feel it, that makes a difference and it's increasingly what's happening," he said.
Wheatley argued that, in future, the regulator should have the power to impose stronger sanctions on singled-out senior persons with designated responsibilities. It has been hard to nail individuals because the "matrix of firms means individuals diffuse responsibility", he argued.
The FCA is expected to embark on a consultation in the first half of next year on what its powers should be with respect to holding senior persons to account, which follows on from recommendations made by the banking commission's review into standards earlier this year.
Wheatley dismissed MPs' claims that he determined the size of fines based on discussions with other regulators. "We have contact with other regulators that look at a case of a similar offence, but there is no discussion. We develop our fines in relation to our policy at the time."
Wheatley also said he was aware a balance needed to be struck with regulatory enforcement in order to continue to allow for innovation and growth in the market.
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