Bank of England Governor Mervyn King said "radical" changes such as those proposed by President Barack Obama should be considered as officials overhaul banking regulation to prevent another financial crisis.
Obama’s plans "make very clear that radical reform is on the table, and that is the most important thing," King said in testimony to Parliament’s Treasury Committee in London today.
Regulators should not be forced to say what proposals they prefer "because they need to be able to explore in much more detail how they would work."
Obama last week called for limits on the size and trading activities of financial institutions in order to reduce risk-taking, steps advocated by former Federal Reserve Chairman Paul Volcker.
King called on lawmakers to take evidence on banking regulation proposals from U.S. analysts with a range of views.
"I hope when your committee takes evidence from people in the U.S. you will talk to people that come up with pretty radical proposals, not just Paul Volcker and President Obama’s team, but people like Professor Kotlikoff who have got a wider set of proposals," he said.
"All of these things should be on the table for debate and discussion."
Kotlikoff is an economics professor at Boston University who served on President Reagan’s Council of Economic Advisers from 1981 to 1982. He has worked as a consultant to the International Monetary Fund and the Bank of England.
Bank of England Deputy Governor Paul Tucker, speaking alongside King, said "I quite like" Obama’s move and he backed the "spirit" of the proposals.
