Gordon Brown warns on financial crisis risks

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Old prime minister Gordon Brown has warned that the UK and other paramount economies are not well-equipped for the next financial crisis.

Mr Brown, who was in Number 10 during the banking boom of 2007-8, said they need to guard against «complacency» or «not being au courant» of risks.

The next crisis could come from Asia’s blight banking sector, he suggested.

In the UK the government must work more closely with the Bank of England to insure financial stability, he added.

Mr Brown, who served as chancellor from 1997 to 2007 and prime divine until 2010, was speaking at an event marking 20 years since he revealed the Bank independent.

At the same event, Prime Minister Theresa May said the Bank had been «bolstered and improved» since the financial crisis.

Next financial crisis

Mr Brown put someone on noticed the next financial meltdown could come from Asian banks which are not contingent on expose to formal regulatory oversight, known as «shadow banking».

«If that emergency were to emerge, would we really know who owed what to whom and on what designates?» Mr Brown said.

He suggested that the G20 group of the world’s biggest economies was not doing passably to track those or other financial risks.

As a result, he said, the «risks of either complacency or of simply not being aware of what is going on in the wonderful arise».

He added that the co-operation put in place during the financial catastrophe — which he helped to lead — had been watered down since 2010.

UK bank ‘left-hand exposed’

Critics have said the Treasury, under Mr Brown’s superintendence as chancellor, was too slow to spot the 2007 and 2008 crisis, along with Burg regulators and the Bank of England.

Some have suggested Mr Brown’s purposefulness as chancellor to split financial regulation between those three main parts had contributed to the crisis.

But on Thursday, Mr Brown said the failure came thither because they did not work together closely enough.

He warned that a decade later, the Bank was being left-hand «exposed» as the main financial regulator, which would «haunt us if a disaster were to hit Britain».

«There is no way you’re going to deal with a crisis unless the Bank and the management are working together,» he said.

Mr Brown suggested the Treasury and the Bank should set up a common group to deal with financial stability.

On Thursday, Mrs May set out the relationship with the Bank, order it was the government’s role to ensure the economy serves «the interests of ordinary make use of people».

The Conservatives reformed financial regulation after the crisis, shame the Bank at the centre of the system through the Financial Policy Committee.

The Exchequer also stays in contact with the Bank through regular encounters, and has a non-voting official on the Bank’s interest rate-setting committee.

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