There’s a lot of ‘spin’ around with the papers falling for it! The proposals would remove our independence as a financial world power for they abolish our veto over matters fiscal. Brown has agreed. But the headlines often hone in on the chance of Mervyn King getting the deputy’s job. Big Deal! - in exchange for British fiscal sovereignty?
With the connivance of Lord Turner rubbishing and sabotaging the City and the government surrendering on the regulatory front one can reasonably assume that the days of the City of London are finished. In which case who is going to pay all the vast amount of tax the City has contributed.
Christina
CITY AM 23.9.09
EU regulators to call on King
EU REGULATION
ROB DAVIES
BANK of England governor Mervyn King could be handed a powerful role with a new pan-European regulator, in an effort by the European Commission (EC) to bring the UK on board with the plans.
The EC will today publish its blueprint for a revamp of European financial supervision, which is set to create four new agencies tasked with monitoring economic risks across the 27-nation European Union.
One of the new bodies, the European Systemic Risk Board (ESRB), is likely to be headed up by European Central Bank (ECB) president Jean-Claude Trichet, but King could be installed as his deputy to allay British fears of having its voice drowned out in Brussels.
Sharon Bowles, the Liberal Democrat MEP who chairs the European Parliament Economic and Monetary Affairs Committee, said King was the right man for the job.
“It would make a lot of sense for Mervyn King to have that post. The UK is important in terms of size and level of experience and the Bank has worked closely with the ECB,” she said.
The draft laws to be unveiled today will flesh out reforms agreed in June to introduce pan-European supervisors who will draw up a rulebook governing the behaviour of financial institutions.
Alongside the new ESRB, which will consist of the representatives of national regulators, will be three watchdogs charged with overseeing banks, the securities sector and insurers.
The final draft was still in the process of being drawn up last night, but will include a “safeguard clause” allowing member states to contest decisions with the council of ministers and ensuring that no decisions impacting on fiscal policy could be forced on a country.
The clause is designed to allay worries in the UK and other countries that the European regulators would be able to force national counterparts to bail out institutions when they may not want to do so.
PAN-EUROPEAN REGULATORS: THE PLANS
• The European Systemic Risk Board (ESRB) will sound its warning sirens if it sees emerging threats to the financial system, such as those that triggered the current crisis.
• It will be able to issue warnings, saying what should be done about risks in the financial system. It could order a country to take action, for example, and that country would be obliged to explain itself if it does not do so.
• The warnings will be weighty and those who receive them "cannot remain passive", says the draft. But the board will have no binding power in a legal sense, relying instead on political pressure for influence.
• The body would effectively be an arm of the European Central Bank (ECB), given that staff will mostly come from the ECB, which will also appoint the head of its secretariat.
• It will be managed by a so-called general board including the ECB president, governors of the region's central banks and a member of the EC.
• Its chair will be elected by EU central bankers. Many believe this makes the head of the ECB, Jean-Claude Trichet, the most likely person to take the post.
• Three new groups will watch banks, insurers and exchanges – the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority. They replace three advisory bodies.
• They will set the bar for supervision standards and establish uniform rules around Europe. Their rulebook will become European law.
• They can tell regulators to act, although there will be an appeal process.
TELEGRAPH 23.9.09
Germany wants to rein in EU financial regulation plans
Germany has serious concerns about proposals for an EU apparatus of "super-regulation" for banks, insurance, and securities to be unveiled today, and may join Britain in trying to curb the ambitions of Brussels.
By Ambrose Evans-Pritchard
Berlin says the European Commission has overstepped its mandate by pushing for the creation of three agencies with supra-national powers to dictate policies to regulators in each state, including Germany's BaFin watchdog.
"Binding powers for EU regulators would undermine the prerogatives of national oversight bodies: we see this as very critical," said an official, briefing the German media.
Germany's constitutional court has already ruled in a landmark judgment on the Lisbon Treaty that no further powers can be transferred from Berlin to the EU institutions without the consent of Germany's parliament.
The three new bodies – a European banking authority in London; an insurance authority in Frankfurt; a securities authority in Paris – are to be made up of chief regulators from the 27 EU states.
They are to have a permanent staff and legal powers to "settle the matter" if there is no consensus, in effect stripping states of their veto power. [THIS is the crux of the matter -cs] This would reduce Britain's Financial Services Authority to a branch of the EU machine.
Berlin is in favour of stronger EU regulation, insisting that it is "not in the British camp". However, there is a shared interest in clipping the wings of over-zealous EU officials.
In theory, the EU could ram through the plans by qualified majority vote (QMV) but any such attempt to overrule both Germany and Britain would be courting fate. Ireland, Luxembourg, Sweden, and some Eastern European states also have objections.
The plans contain a safeguard clause to protect the "fiscal sovereignty" of member states. EU finance ministers would decide any appeal by majority vote. The European Court would have the final say. [This is no safeguard at all. Other states have different priorities and it is a vital British interest to continue to protect our fiscal sovereignty with a veto -cs]
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