Bank governor says weakening rules risks repeat of 2008 crisis

The governor of the Bank of England has warned the chancellor against a radical watering-down of City banking rules because it would risk repeating the mistakes that led to the 2008 financial crisis.

- Richard Partington

Andrew Bailey said that while some adjustments to the rules could be helpful, wholesale changes to unleash risk-taking in the City of London in the name of economic growth would be counterproductive.

"There isn't a trade-off between financial stability and growth. We've had that experience," he told MPs on the Treasury select committee.

Last week Rachel Reeves used her annual Mansion House dinner to announce sweeping changes to banking industry rules, telling City bosses she believed that in too many cases regulation was a "boot on the neck" of business.

Bailey refused to back the chancellor's analogy when pressed by the Treasury committee chair, Meg Hillier, saying: "I do not use those terms, let me say that... It is not a term I use."