Senior BoE figure warns against heavy-handed regulation

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A heavy-handed response to regulating the financial services sector could lead to unintended consequences, according to Monetary Policy Committee (MPC) member, Andrew Sentence.

Speaking at a conference in London, he also claimed the boom that led to the current bust could not have been detected by the traditional measures of inflation used by the Bank of England. Sentence says monetary policymakers need to develop better instruments to maintain financial stability and avoid booms in the finance system. He says monetary policymakers and regulators need to work together to ensure asset bubbles are not created by distortions in financial markets. "However, there is also a danger of unintended consequences from heavy-handed regulatory interventions in the bankin...

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