Sir Howard Davies, chairman of the Financial Services Authority (FSA), has sought to quell fears that the watchdog's potential reforms on soft commissions and unbundling would be rushed through or that they would make the City of London a less competitive marketplace.

Davies, who was addressing the Institute of International Finance in Berlin on Thursday, said that the FSA had accepted that its proposals on conflicts of interest investment banking and fund management reforms had caused some "fluttering in the dovecotes".