Section 108 of the UK’s Deregulation Act 2015 provides that regulators may be required to “have regard to the desirability of promoting economic growth.” What this means is that they must
in particular, consider the importance for the promotion of economic growth of exercising the regulatory function in a way which ensures that—
(a) regulatory action is taken only when it is needed, and (b) any action taken is proportionate.
On the face of it this looks potentially reasonable – it is about encouraging regulators to make sure that regulation is necessary and proportionate (of course regulation should be proportionate and why would you ever want unnecessary regulation). But it isn’t clear how these terms are going to be interpreted, or whether the number of potential targets for this approach is small or large (for some concerns, see here). The provision has the potential to cause significant harm to all of the interests regulation is supposed to protect – and this is even before the TTIP regulatory cooperation measures are used to limit regulation. The UK can do it all on its own.
new paper March 6, 2015Posted by Bradley in : financial regulation , add a comment
I have been working on this paper on Changing Perceptions of Systemic Risk in Financial Regulation.