The Financial Services Authority has stood firm over the proposed right of the Financial Conduct Authority to ban products.

Speaking at the City and Financial Conference last week, Tracey McDermott, acting director of the FSA’s Enforcement and Financial Crime Division, said the power was controversial but showed a willingness to take action.

She also admitted the decisions could be viewed as “unpopular and risky” but said they were necessary to protect consumers or the markets.

The FCA currently has the proposed power to ban products if there is a risk of mis-selling and also prevent individual firms from selling certain products if their sales process looks as if it could lead to mis-selling.

It could also take earlier enforcement action on firms if their business model is likely to lead to poor consumer outcomes.

She said: “Obviously, early intervention comes with risks and with potential downsides for the regulator, the industry and, most importantly, for consumers. So the FCA will need to be targeted and proportionate in when, how and why we intervene.

“We will also need to be prepared to be much more transparent-within the bounds of statue-about what we are concerned about and why.”

She said she hoped this earlier enforcement action would rebuild trust in the financial services industry.

“The reputation of the financial services industry will not recover unless the public believes that will be dealt with fairly and professionally by those in the industry.”

The Financial Services Bill is currently being scrutinised by MPs in Parliament who have until 20 March to make their amendments.