Mr Bailey said the last 15 years had seen the “emergence of risks to financial stability originating in the non-bank system”, incorporating any financial institution that is not a bank.
Speaking at the University of Chicago Booth School of Business, he said there was a “reaction taking place against regulation, and the responses to the GFC (global financial crisis).”.
The Governor of the Bank of England has cautioned against unravelling regulation introduced after the global financial crisis amid Government-led efforts to cut red tape.
These businesses must “manage the risks they face, and in some parts of the system it is appropriate that regulations are in place to provide more assurance of this management taking place”, the Bank chief said.
Sir Keir Starmer criticised the “morass of regulation that effectively bans billions of pounds” of investment in the UK, describing “thickets of red tape” that he said have spread through the economy.
