Financial crisis risk looms over US deregulation- French official

France’s central bank governor, François Villeroy de Galhau, warned on Wednesday that any push for financial deregulation by the incoming US administration could elevate the risk of a future financial crisis.

Speaking to the French Senate’s finance commission, Villeroy de Galhau cautioned against relaxing financial regulations, emphasising the importance of strong oversight to maintain stability in the financial system.

His remarks follow proposals from US President-elect Donald Trump’s team, including Trevor Hill, a potential nominee for a banking regulator, who has called for reduced regulatory requirements for banks, including the relaxation of capital reserves and cryptocurrency rules.

Hill also suggested revisiting Basel III capital requirements for large banks, which many countries have already implemented.

Villeroy de Galhau stressed that, while Basel III has helped stabilise Europe’s banking system, any shift towards lighter regulations in the US, particularly for non-bank financial actors and cryptoassets, could endanger global financial stability.

Attribution: Reuters

Subediting: M. S. Salama