LONDON (Bloomberg) - Senior bankers have failed to accept "responsibility" for the financial crisis and cultural changes are necessary to create lasting reforms, the head of the UK's market regulator said yesterday.

The Financial Services Authority (FSA) plans to start judging how senior executives and boards instill a responsible culture at financial companies, CEO Hector Sants said in an interview at Bloomberg's offices in London yesterday. Where firms aren't found to have good governance, enforcement actions including bans or fines could result, he said.

"The FSA isn't trying to set itself up to determine a new ethical framework," said Mr. Sants. "We'd be looking at whether they are treating their customers fairly, how they engage with counterparties, and the way they behave in the marketplace."

Lawmakers around the world, including the European Union and the US, are redesigning regulatory architecture in the wake of the worst financial crisis in a generation. UK opposition Conservative lawmakers have pledged to abolish the FSA should they win the next election and return supervision of financial-services companies to the Bank of England.

Splitting up the FSA's duties, as Conservative lawmakers have pledged, would be a return to the "dark ages", Mr. Sants said. Returning lender supervision to the Bank and creating a new agency for consumers will create more problems than it will solve, he said.

Mr. Sants goes further in his defense of the agency than FSA chairman Adair Turner, who has previously said he is "agnostic" about the regulator's future role.

Mr. Sants said his comments were general, and not directed specifically at the Conservative proposals.

"We are trying to move the debate away from simple strap- lines," Mr. Sants said in the interview. "The primary element of a reform agenda should be new rules, new approaches to supervision, which we believe we've put in place, and we also think it's important that firms change their behaviours."