LONDON — U.K. Treasury chief Rachel Reeves said Tuesday that she'll cut red tape for banks and finance firms so that ''informed risk-taking'' can help kickstart Britain's sluggish economy.
The government is trying to regain the economic initiative after rocky weeks of costly U-turns and figures showing the U.K. economy contracted for two months running.
Arguing that regulation often ''acts as a boot on the neck of businesses,'' Reeves announced plans to pare back some of the rules introduced after the 2008 global financial crisis, which was triggered by risky lending. That includes reforms to ''ring-fencing'' rules enacted to separate banks' retail and investment banking activities, and a review of the amount of capital banks must hold.
She said that it was the widest set of reforms of financial services in more than a decade.
''We are fundamentally reforming the regulatory system, freeing up firms to take risks and to drive growth,'' Reeves said on a visit to Leeds in northern England.
Reeves set out the changes in her annual Mansion House speech to finance bigwigs in London, saying she was ''rolling back regulation that has gone too far in seeking to eliminate risk."
''I have placed financial services at the heart of the government's growth mission ... with a ripple effect that will drive investment in all sectors of our economy and put pounds in the pockets of working people,'' she said.
Reeves also praised new Bank of England guidance allowing mortgage lenders to loan more than 4½ times a buyer's income, saying that would allow tens of thousands of people to buy their first home.
