Red Tape is Strangling the Economy
1 July 2024
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Housing and Planning
Economics
Housing and Planning
IEA research quoted in The Sunday Times
Research on the negative impacts of Anti-Money Laundering (AML) regulations by IEA Senior Research Fellow Jamie Whyte and a paper by IEA Director of Public Policy and Communications Matthew Lesh explaining how red tape has pushed up prices across the economy, have been referenced in The Sunday Times.
Discussing Jamie’s paper, the article said:
“A recent report, Debanked, by Jamie Whyte for the Institute of Economic Affairs in London, examined the economic consequences of anti-money laundering (AML) regulation. The report highlighted the fact that, in 2021-22, UK banks closed 343,000 accounts.
“‘In about half of those cases, the reason was that the bank could not satisfy itself that the customer was not involved in money laundering or other financial crimes,’ he wrote. Guilty until proven innocent.
“The report also said that complying with AML regulations cost UK banks £34 billion a year — twice what was spent on policing all other forms of crime. Those compliance costs must ultimately be passed on to customers through higher account fees, higher loan rates or lower interest on deposits.”
It goes on to discuss Matthew’s research:
“A report published this year by the same London think tank highlighted how red tape was fuelling the cost of living crisis in the UK. The report, by Matthew Lesh, argued that in recent years prices had risen significantly faster than wages. According to the Office for Budgetary Responsibility, real household disposable incomes are now expected to be 3.5 per cent lower in 2024-25 than their pre-pandemic levels. The results are a falling quality of life, increasing hardship for people at the bottom of society, and a surly public mood around the British general election.
“Lesh argues that a useful starting point is to consider which products have, and which have not, risen in price over recent years. Inflation is most often quoted as a single figure: the UK consumer price index rose 80 per cent between 2000 and 2023. There is, however, remarkably little attention paid to the significant variability in the cost of different goods and services over time.”
Read the full article here.
Read a copy of Jamie Whyte’s Debanked: The Economic and Social Consequences of Anti-Money Laundering Regulation.
You can also read Graphic Content: How Red Tape is Fuelling the Cost of Living Crisis, by Matthew Lesh.
Discussing Jamie’s paper, the article said:
“A recent report, Debanked, by Jamie Whyte for the Institute of Economic Affairs in London, examined the economic consequences of anti-money laundering (AML) regulation. The report highlighted the fact that, in 2021-22, UK banks closed 343,000 accounts.
“‘In about half of those cases, the reason was that the bank could not satisfy itself that the customer was not involved in money laundering or other financial crimes,’ he wrote. Guilty until proven innocent.
“The report also said that complying with AML regulations cost UK banks £34 billion a year — twice what was spent on policing all other forms of crime. Those compliance costs must ultimately be passed on to customers through higher account fees, higher loan rates or lower interest on deposits.”
It goes on to discuss Matthew’s research:
“A report published this year by the same London think tank highlighted how red tape was fuelling the cost of living crisis in the UK. The report, by Matthew Lesh, argued that in recent years prices had risen significantly faster than wages. According to the Office for Budgetary Responsibility, real household disposable incomes are now expected to be 3.5 per cent lower in 2024-25 than their pre-pandemic levels. The results are a falling quality of life, increasing hardship for people at the bottom of society, and a surly public mood around the British general election.
“Lesh argues that a useful starting point is to consider which products have, and which have not, risen in price over recent years. Inflation is most often quoted as a single figure: the UK consumer price index rose 80 per cent between 2000 and 2023. There is, however, remarkably little attention paid to the significant variability in the cost of different goods and services over time.”
Read the full article here.
Read a copy of Jamie Whyte’s Debanked: The Economic and Social Consequences of Anti-Money Laundering Regulation.
You can also read Graphic Content: How Red Tape is Fuelling the Cost of Living Crisis, by Matthew Lesh.
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