The Financial Conduct Authority (FCA), the UK’s financial regulator, has warned the global economy will suffer if US president Donald Trump dismantles the 2010 Dodd-Frank Act.

A colossal piece of legislation, Dodd-Frank came into force after the 2008 recession in an attempt to guard against another Wall Street crash.

The landmark regulatory act prevented US banks from relying on debt for funding or engaging in any other risky practices blamed for the financial meltdown.

On Friday, Trump signed an executive order to overhaul the act.

These regulations [Dodd-Frank] enshrine too-big-to-fail and encourage risky behaviour,” he said. “They’re doing in some cases the opposite of what they were meant to do.

Andrew Bailey, head of the FCA, warned on the weekend that foreign regulators would lose confidence in the ability of the US to handle a banking crisis if it abandoned the protections provided by Dodd-Frank.

“We would have to say do we really think there is a resolution mechanism in there that we would have confidence… has got what it needs to be effective?” Bailey said in an interview with the Financial Times on Friday in Washington.

“Unfortunately, if you can’t answer that question in the affirmative then you are undermining… the consensus in terms of direction of travel that has emerged in recent years. It is quite fundamental,” he added.

Bailey is not alone in expressing concern about the dismantling of Dodd-Frank.

Sherrod Brown, the top Democrat on the Senate Banking Committee, warned against the proposed rollback of the act.

Any actions to undermine these protections encourage Wall Street’s risky behavior and leave taxpayers and our economy exposed to another catastrophe.

Paul Volcker, the former chair of the Federal Reserve, added that the end of Dodd-Frank would have global implications. He said:

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What needs to be understood is that the existing approach has been developed in concert with other leading international regulatory authorities . . . This is an area where a common methodology is critically important internationally.

However, others have welcomed the legislative overhaul.

“We are supportive of him [Trump] bringing forth this legislation and looking forward to working with him,” said US treasury secretary Steven T. Mnuchin.

Jeb Hensarling, the House Financial Services chairman applauded Trump’s decision to “end bailouts” and “make Wall Street accountable” in a statement.