Mr Sants' comments came in response to questioning about the “detriment” suffered by customers who had invested in offshore institutions, particularly subsidiaries of failed Icelandic banks, during a Treasury Select Committee session on the work of the FSA earlier this week.

When asked by a committee member whether he thought "the FSA did enough to warn consumers of the dangers of investing offshore?" Mr Sants replied: "We do have to ask the question of what is the extent of the FSA's remit in that sense.”

"We are talking about companies that not only are not regulated by the FSA, but they are not even owned by companies which are regulated by the FSA and of course to not fall within the FSCS and the consumer protection regime in the UK," Mr Sants said.

"These are issues clearly outside our regulatory boundary in the supervisory sense," Mr Sants said.

The role of offshore financial jurisdictions and the scope of consumer protection for UK savers in such places has become a hot political issue in the UK after savers in Icelandic banks based in centres such as Guernsey and the Isle of Man lost money when the banks collapsed. The UK government has launched a review into the UK’s links with the Crown dependency offshore centres.

Mr Sants added: "We certainly have an obligation to make sure that where those firms are marketing into the UK and fall into our remit in that respect, that the information is clear as to their regulatory status and the status of their consumer protection."

The Treasury Committee also raised the issue of the impact on those people who saved in the offshore banks because of the advice given to them by UK independent financial advisors.