James Moore: British watchdog will oversee Libor
Outlook We're often told that regulation is a thoroughly bad thing, holding back business and getting in the way of job creation (see repeated Conservative manifesto).
As for the EU, it is of course from whence all evil springs. The two together? Well how many derogatory adjectives can you fit in 900 words?
However, unfashionable though it may be to say so, they can be a good thing. No, honestly.
Exhibit A for the defence are financial services commissioner Michel Barnier's proposals for shining a light into the City's dark corners – the price-setting mechanisms for everything from foreign exchange to oil.
These have for years chugged merrily along, with very little scrutiny. They are sometimes rather arcane – for years the gold price was set in a small room at Rothschild. Each of the four banks involved would either raise or lower little union jacks indicating their readiness for the price to be "fixed". That's a rather interesting way of describing the process, if you think about it.
As we now know there's an awful lot of fixing that has been going on with pricing benchmarks in the City, and while the method of setting the gold price may have been quaint and entirely innocent, plenty has been anything but. Starting with Libor interest rates.
Mr Barnier is proposing to change that, with banks set to face fines of up to 10 per cent of turnover if they don't make adequate attempts to prevent bad behaviour around benchmark setting. That's a proper fine that even City banks might take notice of.
Their natural reaction might therefore be to take a hike, but Mr Barnier is also proposing to stop them from walking away from their responsibilities, thus preventing the whole system from falling apart. The problem is national regulators don't like the idea of the EU taking control under the auspices of its shiny new Paris-based banking watchdog. Britain in particular.
So between the leaking of an early draft, and yesterday's official first draft, there have been a few changes. Now national watchdogs will oversee their own benchmarks – so we get Libor, the Belgians get Euribor rates and so on. Where there are disputes they will be settled by a "college of regulators". If that looks messy at best, that's because it is.
It's worth remembering that it's not always Europe which makes the mess. Member states are pretty good at it too, and if this one blows up, it's on them, including Britain.
- 1 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 2 Greece debt crisis explained: A history of just how the country landed itself in such a mess
- 3 People all over the world are getting semicolon tattoos to draw attention to mental health
- 4 Greek debt crisis: Yanis Varoufakis's funniest (and most memorable) quotes
- 5 The biggest first date turnoff has been revealed
Greece debt crisis explained: A history of just how the country landed itself in such a mess
Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
Man dies instantly after shooting firework from top of his head
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
Father faces deportation to Thailand after 27 years in Britain for two 'stupid crimes'
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...