Andrew Bailey: Regulation is not hampering growth

Friday 03 October 2025 4:03 pm

Financial institution of England governor Andrew Bailey has warned of the hazards related to paring again monetary regulation, in a speech by which he additionally denied that the abundance of purple tape foisted on the monetary sector after the Nice Monetary Crash had impeded financial exercise.

Addressing the Klass Knot Farewell Symposium, Bailey, who was not too long ago made chair of the Monetary Stability Board, argued that even because the “pro-cyclical tide” turns towards extra deregulation, central bankers shouldn’t be prohibited from “accumulating mandatory information in new areas of threat”

“There isn’t any trade-off between monetary stability and aims like progress and competitiveness,” he mentioned, including: “I push again on the line of argument that post-crisis monetary regulation prompted the autumn in productiveness progress, by limiting enterprise funding within the economic system.”

Many will view the staunch defence of strong governance as a tacit rebuke to the federal government’s flagship deregulation push that has seen the Chancellor accuse Britain’s watchdogs of being a “boot on the neck of companies”.

In a bid to revive the UK’s flagging economic system, Prime Minister Keir Starmer and Rachel Reeves have vowed to bear down on pointless purple tape and “regulate for progress”.

Development drive

The drive has resulted in a flurry of pro-growth bulletins from the Monetary Conduct Authority – the UK’s largest monetary watchdog – together with loosening remortgaging guidelines and lifting its ban on retail investor entry to cryptocurrency tracker funds.

The Financial institution of England’s personal Prudential Regulation Authority, which polices the UK’s banking sector, has additionally unveiled a number of measures to chop down the burden it locations on corporations. Final month, it unveiled a collection of measures aimed toward lowering its reporting burdens on lenders. These adopted the same bundle of reforms aimed toward lowering hurdles to mid-sized banks’ progress.

These strikes jar with the feedback from Bailey, who additionally warned that a lot of the rhetoric surrounding monetary regulation left us extra susceptible to a different monetary disaster redolent of the Nice Monetary Crash of 2007/8.

“As time passes recollections of a monetary disaster fade and this results in a questioning of the persevering with want for the responses,” he mentioned. “This creates the chance of historical past exhibiting indicators of repeating itself, remembering again for example to the power of the deregulation argument earlier than the monetary disaster.

“These of us… who’re veterans of coping with the monetary disaster, don’t are likely to overlook, however I can see proof in at the moment’s world of the reality of [American economist] Minsky’s commentary” that recollections of monetary crises wane over time.