MP calls for complete deregulation

Deregulation should be brought to an end as a result of the crisis hitting the financial services industry, according to Andy Love.

The Labour MP and member of the Treasury select committee told industry figures gathered at the Cicero Forum Financial Services Summit in Westminster on Tuesday afternoon the regulation of the industry needed a rethink.

He said: "I hope we are now in a position where it is not seen as bad for government to be involved in some private sector activity."

Philip Hammond, shadow chief secretary to the Treasury, said while he agreed financial services regulation needed a shake-up he questioned Mr Love's belief that there had been a process of deregulation under Labour rule.

He said: "The FSA has about 11,000 specific rules and yet it did not have the one to stop the problems that have happened.

"There is a real window of opportunity for UK Plc if the government works together with the financial services industry to get this right."

When asked if there should be international regulation of the banking industry as a result of the current crisis, Mr Hammond said he was in favour of a worldwide solution but this should take the form of improved transparency and greater communication.

Mr Love said he was aware this was an issue that interested Gordon Brown and perhaps the International Monetary Fund could be given a bigger role of surveillance of the world’s banks.