PARIS (Reuters) - Any bid to undo regulation developed in recent years in the financial sector would increase the risk of another crisis, the Bank of France governor said on Thursday, adding that the U.S. government’s attitude on this would be key.
New U.S. President Donald Trump has ordered reviews of major banking rules rolled out after the global financial crisis in 2008, in a signal that looser regulation could be on the way.
The Bank of France’s Francois Villeroy de Galhau, a European Central Bank policymaker, said in a financial stability report that regulations were an asset that should be preserved as they had helped make the system more secure.
“Any temptation to go back on this or to massively deregulate would increase the risk of another financial crisis,” Villeroy said, adding that the challenge was now to reinforce these rules. “The attitude of the new U.S. administration will, of course, be key: now more than ever, close international co-ordination and strong political determination are vital.”
Reporting by Yann le Guernigou; Writing by Sarah White; Editing by Sudip Kar-Gupta