Mark Carney: Brexit outcome could damage efforts to strengthen financial system
Britain's Brexit negotiations threaten to unpick efforts to strengthen the global financial system following the banking crisis , according to the Governor of the Bank of England.
Mark Carney said the outcome of the UK's divorce from the European Union was one of a number of factors that could damage trust, disrupt capital flows, and restrict trade leading to "fewer jobs, lower growth and higher domestic risks".
In a speech at the Institute of International Finance's Washington Policy Summit in America, Mr Carney said: "There are, however, other nascent risks that, if left unchecked, could threaten the progress made, and ultimately undermine the G20's objective for strong, sustainable and balanced growth.
"These risks include the impact of reform fatigue on implementation momentum, the outcome of Brexit negotiations, the need to complete Basel III, and the importance of finishing the job of ending too big to fail."
The comments came as Mr Carney reaffirmed his view that the world's financial system was at a "fork in the road", and that Britain must take the "high road" that builds on the foundations of a new responsible global financial system.
However, he said the regulation put in place to ensure financial stability must be "dynamic" and able to adjust to the challenges that emerge without threatening resilience.
He said: "Implementation must not only be effective; it must also be dynamic.
"That is, authorities must learn by doing and make adjustments, as necessary, to optimise our efforts, without compromising on the level of resilience the reforms are intended to achieve."
Mr Carney said the Financial Stability Board (FSB) - an international body chaired by the Governor that monitors the state of the global financial system - was creating a framework to assess the regulation put in place since the financial crisis.
He said the FSB was also considering rolling out UK processes that flag the financial sector's "bad apples" to companies looking for staff.