Speaking at the European Council Financial Markets Policy Conference, Bailey compared the current situation to before World War One when the open world economy last came under major threat.
There should be global financial services regulation to promote free trade and open markets, Financial Conduct Authority chief executive Andrew Bailey urged delegates in Berlin today.
Speaking at the European Council Financial Markets Policy Conference, Bailey (pictured) compared the current situation to the period between the Great Depression and World Wars; when he felt the open world economy last came under major threat.
Bailey said: “Do we have a regulatory system that does all it can to support free trade and capital mobility, bearing in mind the lessons of history that these are important conditions for economic growth? Not sufficiently is my view.
“Why? Because while we have done a great deal to develop global regulatory standards in the aftermath of the crisis, we have taken very few steps towards using those stronger standards as the basis to govern market access for financial firms.
“Our approaches remain national, or in Europe regional.
“I want to pose the question, would it be possible to take a different approach and to base market access on common recognition of higher level global standards which are transparent and subject to regular review?
“Wouldn’t this be the best thing we could do to support the global economy? You won’t be surprised to know that I think the answers here are yes.”
For banks Bailey called for global standards in terms of capital, liquidity and large exposures.
And on a national level he said authorities should be transparent about their governance, remuneration and other areas that affect the culture within firms.
However he felt smaller firms that choose to trade nationally should not be subject to global standards.
Bailey added: “A much broader commitment to open up market access using global standards would be a decisive step in the right direction at a time when the openness of the world economy is more under threat.
“The last time in history that an open world economy came under major threat, a century or more ago, the response turned out to be a disaster. That’s a lesson from economic history.
“Free trade and open markets remain in my view the best approach to secure stronger growth.”
Bailey stressed that his views do not necessarily reflect those of the FCA orthe Bank of England's Financial Policy Committee.
