The Trump administration’s push for financial and environmental deregulation is “dangerous,” the head of France’s central bank said.
“The current wave of U.S. deregulation is dangerous,” both for banks and non-bank financial services companies like funds and crypto, Bank of France Governor Francois Villeroy de Galhau told French financial magazine Alternatives Économiques in an interview published Saturday.
This creates a “big risk” for financial stability, said Villeroy de Galhau, who also sits on the European Central Bank’s Governing Council.
Villeroy de Galhau differentiated the moves in the U.S. from the push by Brussels to simplify EU regulations, particularly in the field of environmental disclosures for corporate and financial services companies.
The European simplification drive “maintains the objectives of financial stability and climate transition,” he said.
Villeroy de Galhau also discussed the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), a voluntary coalition aimed at mobilizing central banks to address climate change. The U.S. Federal Reserve officially left the NGFS in January just before Donald Trump returned to the White House.
“The Fed joined us under Biden; it is leaving us under Trump,” Villeroy de Galhau said. “We will of course continue: the enthusiasm of this ‘coalition of the willing’ is needed more than ever.”
The central banker also hinted that the ECB could cut its deposit rate to 2 percent by this summer.
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