(RTTNews) - A regulator must not be tempted by the signs of stabilized economic conditions to return to 'business as usual', UK's Financial Services Authority Chief Executive Hector Sants said Monday.

"Regulators must be able to 'go against the tide'", Sants said in a speech at Bloomberg, London. "Politicians, and the industry, must resist temptation to apply pressure to return to 'light touch' regulation and row back the results intensive supervision is delivering."

He said in considering any institutional changes, failing to take into account the lessons learnt from the last two years would be grossly irresponsible. Society must not lose the benefits of the tough, hard learning experience the FSA has been through, he said adding that truly effective institutions are built on strong cultures and that strong cultures need time and experience to evolve.
"More generally, there remains the possibility of tougher times to come for those we regulate. Now is not the time therefore, to be diverting resource to looking at 'structural questions'", Sants said. " We must focus on the right outcomes and regaining the trust that has been lost."

Further, he warned that dividing the duties of FSA would be a return to the "dark ages". Opposition Conservative lawmakers have said they would distribute FSA's duties blaming that neither it or the Bank of England were monitoring risks to the financial system.

by RTT Staff Writer

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