FRANKFURT (Reuters) - Germany’s financial watchdog warned against a loosening of post-financial crisis bank regulations on Friday.
Felix Hufeld, president of Germany’s top financial regulator Bafin, made the call at an industry conference days after the election of Donald Trump, who has said he would scrap some financial rules to help U.S. businesses if he became president.
The financial and banking lobby in the U.S. and Europe has also been pushing for less post-crisis regulation, which the industry says is hampering its ability to lend to companies and stimulate growth in economies still suffering after the effects.
“Barely 10 years after the start of the financial crisis I once more hear the bugle calls of deregulation,” Hufeld said, without explicitly referring to Trump in his speech.
“And I have the impression that these sounds are becoming louder,” Hufeld added. “That is not without risk.”
President-elect Trump said throughout his campaign he would oppose financial regulations and in May said he would repeal the 2010 Dodd-Frank Wall Street reform law, which was passed in the wake of the financial crisis and empowered federal regulatory agencies to restrict banks’ ability to make risky investments.
Hufeld also warned that a loosening or scrapping of existing laws would lead to a new financial crisis.
“The industry, just as politics and regulators, are in need of predictability and continuity - not regulatory volatility,” the Bafin head said.
Reporting by Andreas Kroener; Writing by Tina Bellon; Editing by Alexander Smith