Bank of England Governor Cautions Against Major Relaxation of Banking Rules
The governor of the Bank of England has cautioned the chancellor, Rachel Reeves, against significantly weakening financial regulations for the banking sector, warning that doing so could repeat the errors that contributed to the 2008 financial crisis.
Andrew Bailey stated that while some adjustments to the rules could be beneficial, broad changes aimed at encouraging greater risk-taking in the financial industry in the name of economic growth might do more harm than good.
“There isn’t a trade-off between financial stability and growth. We’ve had that experience,” he told MPs on the Treasury select committee.
Reeves recently announced major revisions to banking regulations during her annual Mansion House speech, describing some existing rules as overly restrictive. Bailey, however, declined to endorse Reeves’ characterization when questioned by the committee chair, Meg Hillier, saying, “I do not use those terms…that’s not a term I use.”
The governor emphasized that those who witnessed the 2008 crisis understand the risks linked to deregulation.
“I can understand when people say the financial crisis is in the past, that it’s resolved, and we should move on,” Bailey said. “But losing financial stability had serious consequences—we faced a deep recession.”
Still, Bailey acknowledged that regulations should not be inflexible, pointing out that post-Brexit, adjustments could align banking oversight more closely with Britain’s needs rather than EU standards.
“There are areas where we should review the rules, and we are open to that,” he said. “But we must not compromise on fundamental financial stability—that’s my core message.”
Bailey’s remarks follow warnings from key figures in post-2008 financial reforms, who have advised against dismantling bank ringfencing—measures put in place to separate retail banking from higher-risk investment operations.
Sir John Vickers, who designed the UK’s ringfencing rules, told *CuriosityNews* that a broad rollback would be a “very bad idea.”
Amid pressure from major banks to ease regulations, Bailey argued that weakening safeguards would provide little advantage to financial institutions while increasing risks for UK households.
Read next
IEA set to urge unprecedented stockpile oil release to lower crude prices
The International Energy Agency is set to request the biggest drawdown of state oil reserves ever recorded, aiming to soothe the price surge sparked by the US‑Israeli strikes on Iran.
The global energy monitor is anticipated to urge its 32 members to free roughly 400 million barrels of emergency
How far could oil prices climb, and what could be the worldwide economic consequences?
Concerns about the world economy have intensified as oil prices have surged past $100 a barrel following the US‑Israel clash with Iran.
Economists warn that a growing chance of an extended war in the key energy‑exporting zone could severely affect living standards globally, reviving fears of a fresh
UK job market stalls as firms stay cautious on hiring
Data indicate that the UK labour market is struggling under weak recruitment demand, with only modest indications of improvement.
Two reports issued on Monday note that firms stay wary of taking on new employees because of cost pressures and economic uncertainty, underscoring the market’s continued fragility.
The monthly employment