UK Must Resist US-Style Bank Lobbying: BoE's King

Bank of England Governor Mervyn King on Wednesday called on UK lawmakers not to follow the US and allow the banking lobby influence changes to UK financial regulation.

Speaking in front of the Treasury Select Committee in London, King said “I don't think we should see legislation in other countries as an opportunity to lower standards and get a bigger financial sector."

Sharon Lorimer

The recent financial regulation passed in Washington represented success for the US banking lobby, King said.

“Their legislative outcome is a morass of different provisions which is massively long and to be perfectly honest represents a large amount of lobbying which has been successful," he added.

King warned the Treasury Select Committee that they must not allow the UK banking lobby have the same success.

"I very much hope and absolutely believe this committee will be able to lead parliament in resisting some of the excessive lobbying which will no doubt rain down on your heads while this is being debated," he said. “We look to you for a simpler, very clear, tough but fair regulatory framework.”

The comments came as the boss of the Bank of England told lawmakers that the recent positive economic data from the UK should not be seen as a reason for policy makers to withdraw stimulus from the economy.

“The debate is about the appropriate degree of stimulus, not about applying the brakes," King said.

"I am arguing that we have room to use monetary policy in either direction," he said. "I don't want to prejudge where it will need to go."

"The wider economic problems around the world underline the fact that we can't be confident that the recovery in demand, output and employment here in the UK will be sustained," he said.