Mr Davies said it was difficult to say anything categorical about European Monetary Union. It was not clear who would qualify or who would choose to go ahead and join if they did meet the Maastricht criteria.
''I thought the EMU qualifying criteria were complex until I read the rules on getting through to the quarter finals of Euro 96. The organisers obviously hired the team who drafted the Maastricht Treaty,'' he added, in a reference to the real burning issue at yesterday's annual currency dealers' conference.
Slow growth was putting both France's and Germany's prospects for qualifying - for Emu, that is - in doubt, he said.
In an aside from his keynote speech about England's prospects at Wembley tomorrow night, keen Manchester City fan Mr Davies said that 9 per cent of London's foreign exchange turnover was trade between the German mark and other European currencies. Some of this would disappear under a single currency, even though volumes traded between the euro and other currencies might make up some of the loss.
Paris and Frankfurt would stand to lose a greater proportion of their business, at 24 per cent and 12 per cent respectively. London's relative advantage might therefore increase.
If the UK stayed outside the single currency, only 4 per cent of the City's currency trading business would be at risk, but Paris would stand to lose 24 per cent and Frankfurt 11 per cent.