Cutting City regulation risks another financial crash, say economists | Financial sector

A group of 58 leading economists and politicians, including the former business minister Vince Cable, has written to the chancellor to say that scaling back City regulation will put the UK at risk of another financial crash.

The open letter, which has also been signed by the former Greek finance minister Yanis Varoufakis and Columbia University professor Adam Tooze, was sent in reaction to the Queen’s speech, which outlined Rishi Sunak’s plans to “cut red tape” through a financial services and markets bill.

“We wholeheartedly support the government’s aim to stimulate long-term UK economic growth, including through financial regulation,” the letter said. “Yet we believe that competitiveness is an inappropriate objective for regulators.”

News of the pending bill – which comes as the UK aims to replace EU regulations following Brexit – has stoked fears about a regulatory race to the bottom, with economists saying it could force…

Read more…