The credit crunch and bank bailouts are forcing an "about turn" by the FSA from principles to rule‐based regulation.

FSA chairman Lord Adair Turner warned the City that the days of soft touch regulation are over. Turner admitted that the regulator ‘had been doing supervision on the cheap’ and said banks and insurance companies would have to pay higher fees as the FSA brings its supervision teams up to scratch.
‘We are going to have to do supervision at the quality that is required to do it really well. If that means the total cost has to go up somewhat then it has to go up,’ he told the FT. "There will be more people asking more questions and getting more information than we were getting before" Turner said. "There is no doubt the touch will be heavier. We have to make sure it is intelligent and focused on where the risks really are."
As part of a thematic review on financial crime, the FSA is currently in the process of visiting some 200 firms, both large and small, to assess the adequacy of their procedures. They expect to see comprehensive crime prevention procedures in place.
Findings from previous visits has showed that many firms allow new recruits to access customer data before vetting has been completed and it is common practice for temporary staff to receive less vigorous vetting than permanently employed colleagues.

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http://www.powerchex.co.uk/interface/files/news/regulatory-tsunami.pdf