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May 16, 2022

As the UK Proposes to Repeat Its Deregulatory Mistakes of the Past, More Than 50 Leading Economists Sound the Alarm to Prevent Another Race to the Regulatory Bottom and Crash

WASHINGTON, D.C.— Better Markets President and CEO Dennis M. Kelleher issued the following statement on the release of a letter by more than 50 leading economists regarding the United Kingdom’s proposal to make “competitiveness” a greater focus in financial regulation:

“Financial firms, their lobbyists, and political allies have used ‘competitiveness’ claims for decades as a justification, excuse, and smokescreen for deregulating the financial services industry.  This was particularly pronounced in the years before the catastrophic financial crash of 2008, which was the last time the UK dramatically reduced its regulation of financial services. Just as it is now, the consideration of competitiveness was a de facto bribe to entice financial firms to locate in the UK, pay lots of taxes, and hire lots of staff.  It also greased the revolving door and increased influence peddling by former regulators, policymakers, and elected officials.

“All that worked well until it didn’t because deregulation incentivizes excessive risk-taking.  As a result, the UK banks’ unregulated gambling led to numerous catastrophic failures, forcing the taxpayers of Britain to fund bailouts and pay the bill for the banks’ losses while millions of people in the UK lost jobs, homes, savings and so much more.

“By proposing to require regulators to worry about the competitiveness of financial firms at the same time they are supposed to be regulating them for safety, soundness, and stability – an obvious and egregious conflict – the UK is really proposing to repeat the mistakes of the past, ignite another race to the regulatory bottom, and risk another devastating crash.  UK policymakers should remember the real pain caused by the failures and bailouts in 2008 of Northern Rock, Royal Bank of Scotland, Barclays, HSBC, Lloyds Banking Group, Bradford and Bingley, Standard Chartered, and HBOS, among others.

“The 50-plus leading economists additionally point out in their letter that the proposal would, among other things, harm the UK’s real economy and reduce economic growth.  The banks would once again engage in regulatory arbitrage globally while capital, investment, and employment would be redirected away from the productive economy, where the benefits of economic growth, including job and wealth creation, are widely shared.  The UK’s policymakers should heavily weigh the views of these economic leaders.”

Read the full letter here.


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit


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