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Labour: Regulators must focus on simplicity
by Michelle Abrego on Nov 15, 2012 at 13:31
Regulators need to stop focusing on product transparency and instead work to make the financial services industry less complex, according to the opposition spokesman for the Treasury.
John Eatwell said the banking crisis and mis-selling scandals were not down to opaque products but the fact consumers did not understand what they were buying.
‘Complexity is the enemy of stability, it is complexity that is the enemy of future financial stability and the regulatory system is getting more and more complex,’ he said.
He said that not only have rules been made more complicated but the documents outlining them had grown larger as regulators tried to cope with understanding the cause of market failures.
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