Speaking at the Turner Review Conference in London this morning, Darling told delegates that the financial service industry does work better when regulated, but that regulation must not impinge on competition and innovation.
He said: “Some people see financial innovation as a bad thing, but the truth is that innovation is essential, and can be a force for good.
“We need to encourage innovation and harness it for the benefit of consumers and investors, and be vigilant that it is maintained. We must be careful to retain what works; there should not be so much regulation so as to stifle innovation, which is so good for us all.
“And we must maintain competition, because the only way to provide choice for consumers – and we need to make sure the regulatory and supervisory body lets that happen.”
Darling also reminded delegates that financial services is a crucial sector to the economy. He said: “We need to expand traditional banking yes, but also in providing services to ageing populations, with requirements for pensions and savings products.
“Many, many people rely on the financial services industry, not only in banking, but in insurance, in legal services and fund management,” he said.