UEFA has the power to ban teams from European competition if their losses exceed the limits allowed, but is expected to shy away from imposing that ultimate punishment when it hands out the sanctions.
Wenger, a known advocate of balanced accounting, prefers the more straightforward punishment.
"You would think you accept the rules and you’re in the competition or you don’t accept the rules and you’re not in the competition – then everybody would understand it," the Frenchman told the British media.
"There are rules. You respect them or you don’t respect them. If you don’t respect them you have to be punished.
"When Uefa doesn’t want to kick the clubs out of the Champions League they have to find a more subtle punishment. To me, and from all of us on the outside, it looks a complicated punishment."
Nine unnamed clubs faced punishment under new rules, which are designed to force teams to limit their financial losses and make soccer more economically stable.
PSG have spent more than 200 million euros ($278.5 million) on players since Qatari investors QTI completed their takeover of the club in 2012 and won the French title on Wednesday.
Big-spending City are two points clear of second-placed Liverpool and, with a vastly superior goal difference, need just a point from Sunday's clash with West Ham United to win a second Premier League title in three seasons.
Wenger agreed it would be "odd" for the FFP offender to emerge as the new English champions.
"Of course there is something wrong but I plead for that for years. There’s two ways of thinking about the whole process. You can say, 'We don’t care, we want the billionaires to buy the big players, they spend what they want', or you say, 'We want to keep things fair'," he added.
"Basically if you say to me tomorrow, we give everybody 100 million pounds ($169.53 million) in the 20 Premier League clubs, I say, 'okay, I'll take the gamble'. That is a fair competition.
"The unfair thing is the inflation can be too big and it can put too much pressure on the clubs who do not have these resources to overpay their players."
(Reporting by Amlan Chakraborty; editing by Nick Mulvenney)
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