The Financial Services Authority (FSA) is carrying out "spot checks" on bankers' pay contracts to ensure they comply with its new code on pay.

In an exclusive interview by readers of The Times, Hector Sants, chief executive of the FSA, also admits that he has secured personal assurances from Britain's biggest banks that they are no longer paying employees for taking excessive risk.

Answering questions posed by Times readers, Mr Sants said: "We have already started carrying out spot checks on individual contracts to ensure compliance and, in some cases, have asked for amendments to be made.

"In October, firms are required to provide us with their policy statements showing that they are conforming with our code. We will follow up on this exercise with further supervisory checks of individual contracts."

Mr Sants added: "I have personally spoken to all the major banks since the code was published and they have confirmed they are already adhering to the code. "

The FSA has been the subject of a wave of criticism since it published its pay code last week, with accusations that it watered down the toughest aspects of its March draft after a lobbying campaign by the City.

Mr Sants insisted this was not the case, saying the FSA decided to have "one simple, all-encompassing, rule" on the link between risk and reward so that "we have the widest possible powers of enforcement".

Royal Bank of Scotland (RBS), which is 70 per cent-owned by the British taxpayer, revealed this week that it had awarded a bonus worth £2.3 million to Brian Hartzer, a new executive, including £1 million just to stay with the company for two years.

RBS has also spent more than £10 million on hiring two bankers. Antonio Polverino, a star banker from Merrill Lynch, is on a £7 million one-year package while Bruce Van Saun, the bank’s new finance director, is joining from Bank of New York Mellon next month on a multimillion-pound salary.

Answering questions about whether the FSA was "fit for purpose" given that it did not identify and prevent the financial crisis, Mr Sants said: "It is widely recognised that the financial crisis was triggered by a series of factors and that responsibility lies with us all: firms, central banks, regulators, governments and consumers."

But he added that the UK regulator had done more than its foreign counterparts to own up to its mistakes.

He said: "The FSA has been very open about stating that, for UK banks, there were flaws in both its supervisory model and in the way it went about implementing it. The senior mangers responsible for the supervision of UK banks at that time have left the FSA."

But Mr Sants said it was a matter of "regret" that the regulator has "yet to restore public trust".

"We need to demonstrate, through sustained results, that we are a changed organisation with the capacity to learn; a difficult task given most of our successes remain private but all our failures are public," Mr Sants said. "However, given time, I believe this goal will be achieved."

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