Andrew Bailey has said the senior managers' regime will help restore trust in the financial services sector.
In a speech at St Mary's University, the chief executive of the Financial Conduct Authority said the senior managers regime was part of the regulator's shift towards regulating people rather than just companies.
Mr Bailey said: "It is no surprise that in the wake of the financial crisis, the question was asked, to what extent are we regulating firms, and to what extent the individuals in them and particularly senior management?
"The answer is both, but with a shift of emphasis towards individuals.
"This is because using the framework of trust, when we seek commitment we have to look more to the promises of individuals, and likewise the embodiment of ethical standards is most obviously seen in individuals, the senior management."
He said this was why the senior managers' regime was so important, because it had responsibility and accountability at its heart.
Mr Bailey said: "For me, these principles are at the heart of rebuilding trust, and yes, they do represent some re-balancing from corporate institutional to individual responsibility, but I emphasise some.
"And, in a regulated industry like financial services, the public interest is embodied in the objectives of the regulator. But it is not just for the regulator to pursue these objectives. Critically, and primarily, they have to be internalised by firms and their staff."
The senior managers' regime currently only applies to banks, but will be rolled out to insurers in December 2018 and to the entire financial services industry in December 2019.
Under the regime, anyone who holds a senior management function at an advice firm will need to be approved by the FCA and every senior manager will need to fill out a statement of responsibilities explaining what they are responsible for.
Mr Bailey said: "Is this the route to restore trust? I hope and think so, but we are not at the end of this journey, and arguably never will be."
Jeremy Edwards, associate partner at Martin Redman Partners, said: "The senior managers regime does appear to give another level of check but the number of phoenixed firms I have seen suggests that perhaps the checks are not those we would expect."
damian.fantato@ft.com
