MM interview: The British Treasury’s Griffith says ‘stability is back’ — MM sat down with U.K. Economic Secretary to the Treasury Andrew Griffith last week while he was in the U.S. for a round of meetings in Washington and New York. It was his first international trip in the role. A big part of his agenda was to convey stability after recent political and economic turmoil surrounding Britain’s leadership. — Griffith’s big message to Washington officials — “I want to reassure them that the U.K. is in a good underlying economic position, which it is. … I expect us to grow over the medium term.” Griffith met with Treasury Deputy Secretary Wally Adeyemo, SEC Chair Gary Gensler, CFTC Chair Rostin Behnam and Fed Governor Michael Barr. — The U.K. approach to financial regulation post-Brexit and Ukraine — “The agendas that we’re all dealing with are how you get that regulation appropriate — how you protect consumers, how you protect the financial system from externalizing risk and putting that onto the taxpayer, but also make sure you can grow. Fundamentally, our job is to drive economic growth and prosperity for our citizens. “It’s not easy in a values-based world, where we’re having to look at how we trade with Russia, potentially how we continue to do business with China but in perhaps a different way that’s driven more by our shared values. “That puts a premium … on making sure that we get the right balance of regulation so that your great firms, you know, Wall Street, can do business in London, they can use that as one of their international hubs, and we can do that in a way that puts as few unnecessary frictions in their way as possible.” (Key context: The U.K. government has laid out a regulatory revamp known as the Edinburgh Reforms intended to repeal and replace “burdensome” retained EU laws governing financial services. Griffith told MM it's about “sensible changes to the rulebook, not a race to the bottom, not even wholly deregulatory, just better regulation that allows people to operate well.”) — The U.K. pitch to Wall Street — “After a period of political turbulence, stability is back. We’ve got a new prime minister, a new team. They’re here for the long term. They’ve got a clear set of plans that’s going to make the U.K. economy a great place to invest.” Griffith’s U.S. itinerary included meetings with Blackstone, NYSE, Bank of America, JPMorgan Chase and Brevan Howard. — The U.K.’s response to its mini-financial crisis in September — “We need to look at the precise pension issues, but in a way to me it was an example of how the system could work. The Bank [of England] working in partnership with the Treasury made a time-limited intervention. That intervention worked. … There will be a number of reviews to look at lessons learned. Undisclosed leverage is always a challenge to prudential financial systems. That is a shared objective just to make sure that that it is understood and it’s transparent wherever it can be.” — Crypto priorities — “Fiat-backed stablecoins that are used for payments are … the most here and now. … “I will shortly be issuing a government paper on our general approach to the regulation of crypto assets, which will be some, not none. So we’re moving into a world where it will start to be a little bit more regulated. … “We’re looking at financial promotions [aka advertising] as something probably very relevant to FTX. … “And simultaneously we’ll also be coming out with a discussion document about how one would look at a sovereign digital currency. … It’s a really good example of where I’d like to move as much as possible in lockstep with the U.S.”
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