LONDON, Feb. 22 (UPI) -- U.S. Treasury Secretary Timothy Geithner said Tuesday Britain's "light touch" regulatory approach contributed to the financial meltdown of 2008.
"Remember your colleagues in the U.K. ran a strategy for a long time called light touch approach to financial regulation that was designed consciously to pull financial activity from New York and Frankfurt and Paris to London," Geithner said in an interview with the British Broadcasting Corp.
"That was a deeply costly strategy for financial regulation," Geithner said.
As London attracted financial business, "Your banking system, not just in the U.K. or not just Switzerland but in Europe, are much, much larger as a share of your gross domestic product than the United States," he pointed out.
"Two, three, four, five times the relative size of your economies than ours is because, in effect, people ran a strategy designed to try to attract that degree of activity outside of those markets anyway," Geithner added.
Geithner gave credit to British Chancellor of the Exchequer George Osborne for seizing the moment to put together an austerity budget.
"I am very impressed -- just as one man's view looking from a distance -- at the basic strategy that he has adopted," he said.