Financial regulations 'could hamper economic recovery'

Any changes to the regulation of banks and other financial institutions could limit the economic recovery by making it harder for them to lend to consumers and businesses.

This is according to Angela Knight of the British Bankers’ Association (BBA), who was speaking at an event organised to introduce new European Union internal market commissioner Michel Barnier.

Ms Knight welcomed Mr Barnier’s appointment and said that the members of the BBA are looking forward to working with him, but said that many banks and other lenders are worried that the costs of the measures being introduced to prevent further problems in the sector have not been calculated.

’There is a prevailing assumption - quite wrongly in my view - that proposed new rules will only hit the banks,’ she remarked, adding that while banks support changes in regulations, there is a risk of ’over-engineering stability’ and introducing too many alterations at once.

Yesterday (March 2nd), Ms Knight responded to Lord Mandelson’s Mansion House speech by noting that many banks have already taken action to reduce their exposure to risk following the financial crisis.ADNFCR-2318-ID-19647822-ADNFCR