LONDON (Reuters) - Bank of England Deputy Governor Jon Cunliffe warned against moves to dilute the banking rules introduced after the global financial crisis, which have come under fresh scrutiny following Donald Trump U.S. presidential election win.
Trump last week ordered reviews of the banking rules put in place after the 2008 financial crisis, while in Britain some supporters of Brexit have called for a scaling back of similar regulations once the country leaves the European Union.
“We’ve made very substantial progress since the financial crisis, increasing the resilience of the financial sector and increasing its ability to support the economy in times of stress both nationally and ...globally,” Cunliffe told the BBC in an interview on Wednesday.
“Those changes were necessary,” he said. “None of us want to see again the sorts of events we saw between 2007 and 2009 and the costs of those events are still very clear.”
Cunliffe said it was too early to say what the outcome of the reform proposals in the United States would be. He said an executive order signed by Trump announcing the review referred to proportionate regulation and the need to prevent bail-outs which did not seem “out of line” with global finance rules.
For Britain, with its large financial services sector, it was important that regulation remained robust, he said.
“One doesn’t become successful as an international centre by having lax standards and by being open to crises and regulatory arbitrage,” Cunliffe said.
He also told the BBC that he considered the risks to the BoE’s latest outlook for the British economy to be evenly balanced between the possibility of growth coming in stronger or weaker than forecast.
Writing by William Schomberg; editing by John Stonestreet