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Under Secretary Steel focused on Treasury's work on a new regulatory blueprint for
“Recent challenges within the mortgage market highlight the risks of this regulatory patchwork and the vital need for a modernized regulatory structure”, he said. “We need a new, modernized approach to regulation – one that is risk-based, globally oriented and flexible in scope”, he added.
“We believe that regulation should be guided by principles at an overarching level”, he made clear. “But in many cases some type of rules-based regulation is necessary”, he added, “in particular, regulation at the retail level will require some focus on rules, particularly to protect less sophisticated market participants.”
With a view to the ‘Regulatory Blueprint’ currently under discussion, Mr Steel said that the regulatory structure will be different from the current one. “We recognize that there are many difficulties in obtaining wholesale changes to the current regulatory structure”, he said. “Therefore, our report will also recommend some less conceptual ideas that we believe will serve as intermediate steps to put us on the path towards the optimal structure of financial services regulation.”