This is dangerous - extremely dangerous - and emphasises one of the
two main reasons that senior financiers in The City of London are
contemplating quitting [see "Pack up your troubles in your new
briefcase, and Quit, Quit Quit" sent earlier] .
The EU is making one of its most audacious power grabs. It has long
resented the fact that the world's leading financial centre is not
part of the eurozone and has prospered in the face of EU attempts to
steal its crown by commercial means. It now has turned the global
financial crisis to ,its own purposes to get control of London by EU
bureaucrats. This is a declaration of commercial war!
These European central banks look after their own parochial needs.
London has global responsibilities
xxxxxxxxxxxxxx cs
==============================NEW YORK TIMES 26.5.09
European Union Looks to Tighten Banking Supervision
By STEPHEN CASTLE
European Union regulators may get the power to overrule national
banking authorities under plans to tighten banking supervision that
are aimed at avoiding a repeat of mistakes that led to the credit
crisis.
The proposals, scheduled to be published by the European Commission
on Wednesday, call for new European supervisors to have the right to
step in and settle disputes if national regulators cannot agree on
the oversight of multinational financial institutions, whose
businesses cross borders.
That idea is likely to provoke opposition from Britain, which has
argued that, since national governments have to finance their
bailouts, their own regulators should have the final say.
A representative said the British government would "consider the
commission's proposals when they are formally published," adding that
they would "be a starting point for discussion."
Wednesday's commission paper endorses the ideas outlined by the
former French central bank governor, Jacques de Larosière, in a
report published in February.
His study rejected the idea of a single European "super-regulator,"
opting for a more incremental approach [='softly. softly catchee
British monkey' -cs]- one more likely to win support in European
capitals.
The commission's plans foresee the creation of a European Systemic
Risk Council to assess information about financial stability and keep
an eye on broader economic risks.
Its members would be drawn from national central banks and led by the
European Central Bank's president. The vice chairman would be
selected from one of the 11 European Union countries that do not use
the euro, a group that includes Britain.
This body would "not have any legally binding powers," according to a
draft of the document seen by The International Herald Tribune. But
it would issue risk warnings and monitor the follow-up, forcing those
responsible authorities to "act or explain" and making its
recommendations public if it chooses.
More likely to provoke opposition are the proposed powers of the
European System of Financial Supervisors, which would also be drawn
from regulators in the 27 member states. They would oversee and
coordinate the work of the national regulators, who supervise
banking, insurance and pensions, and securities.
This body would create a single set of rules to operate across the
European Union, developing "binding technical standards in specific
areas" and drawing up "interpretative guidelines which the component
national authorities would apply."
0
The draft document says that, if the national authorities disagree
over an institution, the European bodies should try to help broker
agreement. If, after a phase of conciliation, there is no agreement,
the European System of Financial Supervisors "should, through a
decision, settle the matter."
If they detect a flagrant breach of European law, the proposal would
also give the European Union power to force countries to come into
line by adopting decisions "directly applicable" to the institutions.
Barbara Ridpath, chief executive of the International Center for
Financial Regulation, a research institute in London part-financed by
the banking industry, said that any proposal that could lead to
Britain's regulator, the Financial Services Authority, being
overruled would probably run into opposition.
"There is a strong upsurge of national preference," she said, "for
national decisions in the sense that it is the national tax-payer
that foots the bill if things go wrong."
However, Patrik Karlsson of the British Bankers' Association said a
possible compromise could involve the principle of binding mediation
in all but the most serious issues. In the most serious cases,
however, national regulators could not be overruled, he suggested.
By contrast, some critics in Brussels accuse the European Commission
of being too timid.
"They are not going far enough in the powers that these authorities
will have over national regulators," said Karel Lannoo, chief
executive officer of the Center for European Policy Studies in Brussels.
"As long as they don't have clear powers you can forget the idea that
the system is going to change," he added. "We already have colleges
of supervisors and they have not worked. With Fortis or Royal Bank of
Scotland there was no real exchange of information, no real oversight.
"What the commission is doing is trying to accommodate the interests
of different member states without proposing something that is good
from the European perspective." [ie good for an ever closer federal
union -cs]
==============================
IRISH INDEPENDENT 27.5.09
Bid to give EU agencies more power over central banks
By Thomas Molloy
COMMISSIONER Charlie McCreevy will unveil plans today to give new
powers to European Union regulators to overrule European central
banks when there are disputes between countries.
supervision more uniform in the wake of the credit crisis.
New agencies would have authority to make regulatory decisions over
multinational companies such as HSBC or Deutsche Bank if local
authorities can't agree, according to a draft of the plan obtained by
Bloomberg News yesterday.
Policymakers are seeking to close gaps in oversight in response to
the worldwide financial crisis.
The plan may set off a fight among governments, as Britain, the
region's biggest financial centre, opposes giving EU agencies any
power over the UK Financial Services Authority and wants to limit its
role to writing common EU rules.
The reforms are based on a report by Jacques de Larosiere, a former
head of the Bank of France and the International Monetary Fund. Irish
figures such as Central Bank governor John Hurley have previously
praised the report and have said reforms along these lines are vital
for the future of European banking.
- Thomas Molloy
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