LONDON (Reuters) - Efforts by the United States government to loosen regulations on banks are “dangerous and extremely short-sighted”, one of the U.S. central bank’s top policymakers said in an interview with the Financial Times published late on Wednesday.
Vice chair of the Federal Reserve Stanley Fischer said that there are troubling signs of a drive to return to the status quo that preceded the 2008 financial crisis.
“I am worried that the US political system may be taking us in a direction that is very dangerous,” Fischer said.
“It took almost 80 years after 1930 to have another financial crisis that could have been of that magnitude. And now after 10 years everybody wants to go back to a status quo before the great financial crisis. And I find that really, extremely dangerous and extremely short-sighted.”
Republicans in the U.S. House of Representatives voted in June to replace the 2010 Dodd-Frank Wall Street reform law, a move that was expected to open the door to revamping or eliminating regulations that came out of the 2007-09 financial crisis.
Central bankers including Fischer, Fed chair Janet Yellen and European Central Bank head Mario Draghi will attend and annual meeting of policymakers next week in Jackson Hole, Wyoming.
Reporting by Abhinav Ramnarayan; Editing by John Geddie