US warns of repeating British regulatory ‘tragedy’

US Treasury Secretary Timothy Geithner © AFP/File Saul Loeb

AFP

WASHINGTON (AFP) – Treasury Secretary Timothy Geithner vowed not to repeat the mistakes of Britain’s “light touch” financial regulation Monday, as the United States and Europe continued to tangle over banking reforms.

Speaking days after a senior European envoy pointedly called on the United States to quicken the pace of reform, Geithner said Washington did not want to see “another race to the bottom around the world.”

During a visit to the United States on Friday, EU internal market commissioner Michel Barnier pressed Washington to fully implement laws aimed at mending the banking system — after shoddy practices plunged the world economy into crisis.

Warning of a “race to the bottom” if competing rule sets emerged, Barnier called on US lawmakers no to heed calls to water down or stall Wall Street regulation.

In a speech in Atlanta on Monday, Geithner shot back, pointing to past European regulatory transgressions.

“The United Kingdom’s experiment in a strategy of ‘light touch’ regulation to attract business to London away from New York and Frankfurt ended tragically,” he said.

“That should be a cautionary note for other countries deciding whether to try to take advantage of the rise in standards in the United States.”

With billions, if not trillions of dollars at stake, regulators on both sides of the Atlantic have tried to shape reform to the benefit of their own banks.

© AFP — Published at Activist Post with license