The City watchdog will consider backtracking on its new rules on how bankers’ bonuses should be structured in as little as 12 months’ time if other international regulators fail to crack down on risky pay practices.

Hector Sants, chief executive of the Financial Services Authority, on Wednesday hit back at suggestions that the regulator had watered down its final code on remuneration, saying it would put an end to the “imprudent, reckless policies” that had endangered financial institutions.