The governor of the Bank of England warned against tearing down regulations that have broadly stable markets since the financial crisis.
“The opposition to regulation and response to the global financial crisis have been reacted,” Andrew Bailey said in a speech at the Booth School of Business in the University of Chicago, London.
He added: “We cannot forget the lasting damage caused by the global financial crisis. There is no trade-off between economic growth and financial stability.”
“That is, there are often options about how we deal with evidence of vulnerability. It is crucial that we have and develop assessment and intervention tools. But these interventions may not always require more regulation.”
The Prime Minister warned that during his speech at the keynote building in November, the Prime Minister warned of the dangers of representing the videotape.
Rachel Reeves added that regulations were enacted to protect the economy after the 2008 financial crisis “goes too far.”
Since her comments, the head of the England household regulator, the Competition and Markets Authority and the Financial Ombudsman Service have announced their resignation.
But the bank governor quoted American economist Hyman Minsky in his comments, saying: “As a memory of past crises, people’s attitudes toward regulatory changes.”
The central bank noted that large hedges and multi-management funds and the growth of large non-bank lenders have helped change the nature of the risk across the market.
These dangers include “the tendency to increase concentration and interconnectedness”, he warned, while “opacity and limited visibility in some markets”.
Bailey added: “The market looks very different from the ones that were five years ago. It involves a huge change in leverage, pricing power, trading speed and liquidity offer.
“To be clear, these changes are not bad in nature, but they can create a new set of financial stability vulnerabilities and we need to understand and monitor and adjust new tools and methods where appropriate.”
