The chairman of the Financial Services Authority has said its failure to spot the banking crisis in advance was partly due to the style of regulation.
A "light touch" approach at the City watchdog had been seen as politically preferred, Lord Turner said.
He told the Treasury Committee this had led to the regulator not asking enough questions about the strategies of certain banks which went on to fail.
Changes to regulation were needed which amount to a "revolution", he said.
MPs accused the FSA of "being responsible for supervising 10 big banks and allowing five to collapse".
Lord Turner said that the FSA would be "fit for purpose" but only after changes were made - which he would be recommending in a report next month.
"It's not just about a change at the margins. It's absolutely fundamental," he said.
Lord Turner and Mr Sants took over the FSA relatively recently, in September 2008 and July 2007 respectively.
At the latest hearings into the banking crisis, Lord Turner said the regulator's most important failure had been to "not recognise systemic wide risk".
His report would overhaul the structure of banking regulation and style of bank supervision, he added.
Remuneration for bankers and proposals for regulating liquidity accounts and hedge funds would also be tackled.
To say that Lord Turner and Hector Sants admitted there were shortcomings at the City watchdog in the years before they arrived would be a bit like saying Nelson Mandela oversaw a modest change in the constitution of South Africa.
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