Ex-ECB’s Knot: Deregulation Could Heighten Risk of Future Financial Crises

3 November 2025

By Marta Vilar – MADRID (Econostream) – Former European Central Bank Governing Council member Klaas Knot said on Monday that rolling back banking regulations would be a mistake, as it could raise the likelihood of future financial crises.

In a speech at the annual meeting of the Asociación de Mercados Financieros, Knot, who headed De Nederlandsche Bank until the end of June, stressed the importance of implementing agreed-upon rules, safeguarding existing frameworks, and adapting to mounting geoeconomic fragmentation.

If deregulation were to occur, the probability of future financial crises would rise, he said. “At this time of exceptionally high uncertainty, that would be a mistake,” he added.

Knot also underscored the need to adapt to growing geoeconomic fragmentation, given its expected repercussions for the financial sector.

Describing such fragmentation as “more or less a given,” he emphasized the importance of minimizing its economic costs by defending the international rules-based financial order and highlighting the costs associated with protectionist policies.