Blair warns against ''too heavy'' regulation of financial sector

2 September 2010 | By Robert Thickett

The former Prime Minister made the comments in his promotional interview last night on the BBC to publicise his new autobiography.

On the subject of the economy, while he argued that Gordon Brown had acted swiftly to stabilise the banks, he says the return to fashion of the teachings of John Maynard Keynes with the state providing a stimulus package over simplified the situation.

He says:  “I would have taken a somewhat different way out of the economic crisis and I think that in the end the right way to deal with this is to recognise that though the state has to come in to stabilise the economy, it’s not the state or government that is going to bring us back to high levels of growth.

“And even with the financial sector I’m a big advocate of global supervision, tracking these new financial instruments - I’m not a fan of regulation that is too heavy that’s going to flatten our financial system I think that would be a big mistake.”

He adds: “We’ll end up in a situation where the banks having been too adventurous, become too risk averse.”