The head of Britain's new financial watchdog said on Thursday it would be no pushover and would bring more individuals to book, but that threats and fines alone would not end the abuses blamed for the financial crisis.
Martin Wheatley played down a comment by his predecessor Hector Sants that the industry needs to "be afraid" of its regulator.
"You won't hear from us a 'be afraid' tone. We want a discussion with senior officials. We have to have a dialogue," Wheatley told a news conference.
"It's about having a balanced approach. It's important there is individual accountability. That will be a priority," he said.
The Financial Conduct Authority (FCA) launches next month, replacing the 11-year-old Financial Services Authority, as Britain's government ends a policy of "light-touch" supervision that failed to avert the 2007-09 financial crisis.
The FCA will enforce rules and punish breaches. A new unit at the Bank of England will ensure banks hold enough capital.
Wheatley said the FCA would be no "pushover". Its new logo, which highlights the C, is designed to symbolise a focus on the behaviour of financial professionals.
But he said relying on ever-larger fines to rein in market abuse and scandals ranging from financial product mis-selling to interest rate rigging would punish shareholders the most, in lower dividends and returns.
Company culture would only change if individuals were also held to account by regulators and customers, he said.
He dismissed suggestions that U.S. and British watchdogs, which have teamed up to fine three European banks a total of $2.6 billion to date for manipulating benchmark interest rates such as the London interbank offered rate (Libor), were failing to hold U.S. finance houses to account.
"We've tried to focus on the more egregious cases," he said. "Some of those cases have come out. Others will now follow."
FCA Chairman John Griffith-Jones, a former top accountant who was accused by UK MPs in January of lacking adequate experience, said he would aim in the first year to establish the watchdog's credibility.
The new body will try to end years of mis-selling of financial products that have culminated in banks being forced to pay 12 billion pounds to date in compensation for loan insurance sales (PPI).
"We will be on the front foot when we see things we don't like," Wheatley said.
Firms are bracing for some of their products to be banned temporarily while the FCA investigates whether consumers are being ripped off.
Not all commentators welcome the new intrusive approach. "The whole development of a new product will become cumbersome," noted Etay Katz, a lawyer at Allen & Overy.
Consumer groups, meanwhile, are reserving judgment as new mis-selling concerns unfold over interest rate swaps.
"We'll be watching closely to make sure the FCA is a true watchdog, keeps to its word and puts consumers at the heart of everything it does," said Richard Lloyd, executive director of UK consumer lobby Which?
The new regulator will give earlier warnings to customers and will be able to select an expert to review a firm's operations, with the firm footing the bill.
Lawyers say parts of the market which regulators have previously focused on less, such as wealth management and wholesale market conduct, are coming under closer scrutiny.
The FCA is vowing to be more sceptical and "follow the money", checking products promising easy returns and abusive, hard-sell tactics in a low-interest environment that could prompt consumers to take excessive risks with savings.
(Additional reporting by Kirstin Ridley; Editing by Tom Pfeiffer)