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European agencies were today on the verge of winning the ability to regulate the City in a major power grab by Brussels.
The European Commission has agreed with EU states to create three organisations to oversee banks, insurers and financial markets from the start of next year.
The supervisory bodies will be able to overrule decisions made by the UK's Financial Services Authority and the Bank of England and intervene at their own discretion.
They will also be able to investigate particular financial practices. Naked short-selling was singled out by the European parliament as an example.
A deal must still be given the green light by the European parliament and finance ministers, however.
The move is intended to help prevent a repeat of the banking meltdown by increasing supervision of the sector.
However, critics complain it is an unnecessary attack on the City.
"This could be absolutely disastrous for the City of London," said David Buik of BGC Partners. "The UK banking system is superior to that of Europe and needs no guidance from the European Union, despite our uncomfortable membership."
Reader views (3)
Its the ratchet effect.
Gradually all decisions go there.
We should get out now
- Alan, Llandrindod Wells, Wales, 04/09/2010 06:22
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Not a smart idea. If the other EU countries were particularly good at doing finance they would have done it by now – none has – so they can’t have the right skills. It is time to instruct these boys in the EC to ease off and leave it to the men (and women) in London. Europe’s best finance workers are here anyway. The EC is utterly profligate in thinking it can run the City in the same disgraceful and fraudulent way that it runs its (un-auditable) self.
- John, St Albans, 03/09/2010 18:08
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The UK is losing yet more sovereignty to the EU. How can an unaudited finance 'gang' regulate anything if they themselves have no transparency??
- bobby, berks, 03/09/2010 12:32
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