The Chancellor Alistair Darling rejected calls for pan-European regulation of financial markets at a meeting of EU finance ministers in Brussels yesterday.
Mr Darling said he backed minor reforms of the current system which enables national super-visors to co-operate on cross-border issues while still allowing them to maintain autonomy and flexibility at home. The argument follows calls by Tomasso Padoa-Schioppa, his Italian counterpart, for a more centralised approach, with a new regime that would see Brussels set binding rules on EU member states.
Ministers at the Ecofin summit discussed a review of the prevailing Lamfalussy system for the regulation and supervision of EU markets, so called after Alexandre Lamfalussy, the central banker who chaired the committee that devised it. Initially established for securities in 2001, the system was extended to cover banking and insurance in 2004.
Last night, the Treasury said that it supported measures to increase the efficiency of the current process, but that it opposed "wholesale reform". It said the UK would instead push for "practical steps" to improve the co-operative framework.
Ministers pointed out that the UK and Germany, which is expected to support the Chancellor's approach, accounted for 55 per cent of total wholesale financial services throughout the EU in 2006. Italy and France, which is also believed to favour a more centralised system, accounted for only 8 per cent of the market during the same period.
Angela Knight, chief executive of the British Bankers' Association, said that closer co-operation between financial regulators was vital and endorsed the Government's approach.
"Financial services regulation in Europe needs evolution, not revolution. Policy development should be a managed process, not a series of reactions to market events, no matter how seismic. A single regulator is not the answer," she said.Reuse content