"Andrew Bailey, the new CEO, has a unique opportunity to put cultural change at the heart of his plans for the FCA."
The research by Cass Business School for New City Agenda warns that "crucial change following the 2008 economic crash is already being watered down".
It believes that the PRA and Bank of England need to go much further to improve transparency and reduce group think, but admitted that there have been significant efforts to improve by both organisations.
However it believes that a "deep seated culture of box-ticking" remains, citing the 13,000 pages of rules, guidance and supervisory statements published by the FCA and PRA that are "both bureaucratic and ineffective".
The report's main concern is that regulators are forgetting the lessons of the crisis, explaining: "The FCA scrapped its review of bank culture and is failing to make effective use of its new powers. The CEO of the FCA was removed in what was widely perceived to be a political sacking orchestrated by the Treasury.
"The PRA is disagreeing with Sir John Vickers on extra capital as it has an unevidenced faith that its supervision will stop banks taking excessive risks. Weakening rules designed to hold senior banking executives to account is the fastest example in over 300 years of watering down regulation following a crisis."
It is now calling for new FCA chief executive Andrew Bailey to demonstrate his independence from politicians and the financial industry and prioritise cultural change.
New City Agenda also says that politicians must reform financial legislation so regulators are transparent and can be held accountable.
The report concludes that the Bank of England and the PRA should conduct a transparent and independent assessment of the progress made with their cultural change programme and have it independently audited.
It also calls on the FCA to introduce a new "comprehensive programme of cultural change", demonstrating that senior leadership is independent from politicians and the industry as well as setting up an Independent Evaluation Office as exists within the Bank of England.
New City Agenda Non-Executive Director, Lord Sharkey, said: “The New City Agenda report serves as a warning against the culture of box-ticking which contributed to the financial crisis, allowed widespread misconduct to occur and let bank executives escape sanction.
"Andrew Bailey, the new CEO, has a unique opportunity to put cultural change at the heart of his plans for the FCA. It is encouraging that he has prioritised creating a clear mission for the FCA and ensuring that it can be held accountable for progress. It is vital that this process of cultural change in the FCA is consistent and helps restore confidence in the regulator.”
