Gordon Gekko must be limbering up for a return appearance, this time in the UK. The antihero of Oliver Stone’s 1987 film Wall Street, who came to embody the worst excesses of financial avarice, has been keeping a relatively low profile in recent years. But now it seems the chancellor, Rachel Reeves, is dusting down the welcome mat and is in a hospitable mood.   

In her increasingly desperate quest for growth, she is turning to the financial services sector for help. At a speech at Mansion House in the heart of the City, she outlined her initiatives, dubbed the Leeds Reforms, proclaiming that she would do away with regulation that acts “as a boot on the neck of business”.  

Reeves clearly hopes that some of the wealth from the world of high finance will benefit wider society, but this notorious “trickle-down” theory faces the small problem that it doesn’t actually happen. India remains a clear example of how great wealth can be accumulated by some, with none of it trickling out into anyone else’s pockets. The contrast in Mumbai between the people who live the high life and those living under tarpaulins is a terrible manifestation of this.

It is only when things go wrong that the financial services sector seeks to involve the wider public. That is certainly the experience of the 2008 financial crisis, when the failing City institutions had to be bailed out courtesy of the taxpayer. Britain has taken longer than other countries to clamber back to pre-crash levels of prosperity.  

The UK’s downfall was given extra momentum by the much-vaunted “light touch regulation” with which the then Labour government had persisted. In 2006, the head of the financial regulator proclaimed his belief in what he called “principles-based regulation”. Three years later, his successor, Hector Sants, noted that “a principles-based approach does not work with individuals who have no principles”.  

Well, it may be that such an unflattering description is unfair on the UK’s current financial sector – but would you want to bet on it? Even though the chancellor’s plans are not yet fully clear, she has indicated she is prepared to begin taking down the ringfence that forms a barrier between the high street banks and those that operate in riskier markets. This has already brought warnings from some of the people who remember why that ringfence is there in the first place. Sir John Vickers, the man responsible for designing it, said that dismantling it would be a “very bad idea”.  

Rachel Reeves was actually working in the finance industry in the build up to the crash, first at the Bank of England and then at the Halifax Bank of Scotland (HBOS), so she cannot be unaware of the damage that a rampant finance sector can wreak. Yet, after a year in office, she is even more in need of economic growth than she was at the start. Every set of economic figures seems to bring bad news, some of it directly because of her efforts.  

The decision to increase employers’ national insurance rates was not expected because it seemed to most observers an unthinkably counter-productive move: a tax on jobs when the object is to get more people into work and stimulate growth in the economy. And lo, so it has turned out to be. Jobs are being lost, particularly in the hospitality sector, and there is no sign of an upturn.  

The employment rights bill, which will soon land on the statute books, is destined to make the situation worse. It certainly answers many of the demands that more militant trade unionists have been making, but without the element of compromise that might have kept employers on side. It will, without doubt, make companies wary of recruiting and will act as a deterrent to small firms taking on any extra staff.  

Meanwhile, her colleagues have ensured that the chancellor’s far from slick efforts to curb expenditure have been thwarted. So her need for growth is exacerbated and her hunting grounds sorely limited. Courting overseas investors is a slim possibility when the business environment into which they are being invited to put their cash is not the most conducive to growth. The financial sector must increasingly appear as the easiest option. It is a sector prone to a bit of exuberance and that is exactly what she needs right now.  

But the chancellor needs to be reminded that the energy of the financial sector can very rapidly turn into “irrational exuberance”, even without the buckets of champagne. Gordon Gekko will not have changed his spots. If Reeves were to give him scope to let rip, that is just what he would do – all over again.