The Frenchman who is set to reign over Europe's banks has vowed to "turn the page on an era of irresponsibility" and rule over the financial sector with an iron hand during the coming five years. Michel Barnier, whose controversial appointment as the EU's financial services chief triggered a row between Paris and London, says he plans to propose a "roadmap" with a raft of fresh regulations and controls to restore trust in Europe's banks.
Last month, the French President Nicolas Sarkozy branded Britain "the big loser" and hailed Mr Barnier's appointment to one of the most powerful posts in Brussels as a triumph over the liberal, free-market ways of the City, Europe's largest financial centre.
During a three-hour session when he was questioned by the European Parliament, the former French foreign minister was applauded as he spelled out the need for more controls at the heart of the sector that many hold responsible for the economic crisis.
"We are not just going to talk about reform. We are going to reform. We need to put transparency, responsibility and ethics at heart of the financial system. No market, no financial player and no product should be allowed to escape anymore," he told MEPs. "Europe must be the first to learn the lessons of the crisis, the worst we've had since 1929."
His words, while music to the ears of many in the chamber, are likely to trigger fresh concerns in Britain, playing into fears that the City's global competitiveness could be hampered by reels of regulatory red tape from Brussels.
"He's now talking about giving European regulators binding powers [to intervene], which he didn't before. He seems to have swung towards the Germans and French," said Kay Swinburne, a British Conservative MEP. Ms Swinburne said the creation of a trio of new European supervisors to oversee banks, insurers and the financial market – planned before Mr Barnier's nomination – could create "more confusion", especially if these were to be allowed to meddle with national authorities.
"The plan was for these authorities to control what's going on and improve coordination and transparency. But it could get very messy if they become legal entities with powers to intervene. I have no doubt that Mr Barnier is very capable but he'll be a very strong character to deal with," Ms Swinburne added.
The 59-year-old refused to be drawn into speculation over whether he would become a pawn in Paris's plans to clamp down on Europe's bankers, or, at the other extreme, that he might cave in to pressure from Britain to hold back on reform. "I am not going to be taking orders from London, Paris or anywhere else," he said resolutely as he cast his eyes around the chamber. He also made a point of reminding his audience that his team would be headed by a British civil servant, Jonathan Faull, and that they would work together, "to protect the interests of European citizens".
In his capacity as Commissioner for the internal market, Barnier will have scope to propose regulation on services, goods and on the financial sector, for approval by the EU's 27 member states. He is also set to help broker a compromise deal to shrink bankers' pay and allow employers to delay or claw back payouts to top traders if their stock market gambles unravel.Reuse content