DOWNING St has hit back at Gordon Brown’s warning that the world risks sleepwalking towards another financial crash, saying he is wrong and that Britain now has one of the “most robust regulatory systems in the world” to protect taxpayers.
The former Prime Minister insisted dangers since the 2008 economic meltdown had increased because the world was now "leaderless".
Asked about the risks of a repeat of the economic collapse of a decade ago, Mr Brown said: "We are in danger of sleepwalking into a future crisis. There is going to have to be a severe awakening to the escalation of risks but we are in a leaderless world."
Mr Brown, who led the UK Government during the onset of the 2008 financial crisis which helped destroy his premiership in the 2010 General Election, said the international co-ordination shown then would be impossible now.
"The co-operation that was seen in 2008 would not be possible in a post-2018 crisis both in terms of central banks and governments working together. We would have a blame-sharing exercise rather than solving the problem.
"In the next crisis a breakdown of trust in the financial sector would be mirrored by breakdown in trust between governments.
"There wouldn't be the same willingness to co-operate but rather a tendency to blame each other for what's gone wrong.”
The Scot added: "Countries have retreated into nationalist silos and that has brought us protectionism and populism. Countries are at war with each other on trade, climate change and nuclear proliferation."
But Theresa May’s spokeswoman told a Westminster briefing: "Since 2008 we have built one of the most robust regulatory systems in the world designed specifically to ensure financial stability and protect taxpayers.
"We have, obviously, reformed regulation to put in place one of the toughest systems in the world and we have made it easier to deal with any issues that emerge on the banking front.”
She explained how in recent years the Government had reformed regulation of the City of London and put in place an “incredibly robust system, one of the most robust in the world, at the same time making sure it's globally competitive”.
The spokeswoman added: "Bank shareholders are now first in line to pay for the losses from any bank failures. They have to hold 10 times more capital than they did before the crisis, meaning that they have larger buffers. Certainly, we have taken significant steps to safeguard our economy."
In his interview with The Guardian, Mr Brown said that the trade war US president Donald Trump had launched against China would be a major obstacle to any international co-operation in a future crisis.
"Trump's protectionism is the biggest barrier to building international co-operation," declared the former PM.
He admitted Labour should have been tougher on the City in the boom years leading up to the 2008 near meltdown.
"Yes, we did not know what was going on in some of the institutions, some of it illegal, and which was being covered up.”
Mr Brown stressed that the penalties for wrongdoing had not been increased sufficiently.
"The fear that bankers will be imprisoned for bad behaviour is not there. There has not been a strong enough message sent out that government won't rescue institutions that haven't put their houses in order," he added.
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