UK warns EU not to stifle City of London

  on

LONDON - Britain has warned its EU partners not to stifle the City of London's financial services industry with excessive regulation, responding to concerns that France will push for tighter rules at its expense.

London, whether others like it or not, is New York's only rival as a truly global financial centre. No other centre in Europe offers the same range of services: banking, insurance, fund management, law and accountancy, Chancellor Alistair Darling wrote in The Times.

It is in all of Europe's interests that they prosper alongside their close European partners, he added in an article published on Wednesday.

His comments come after French President Nicolas Sarkozy said on Tuesday that the nomination of a French commissioner to oversee European Union markets will help continental economic ideals prevail over a discredited Anglo-Saxon model.

Sarkozy blamed the reputedly free-wheeling Anglo-Saxon model for the global economic downturn and hailed the recent appointment of Michel Barnier, a former agriculture minister in his government, as EU internal market commissioner.

Finance ministers from the 27-country European Union were on Wednesday reported to be close to a deal to set up new watchdogs to police banks following the credit crisis.

Britain has chaired the G20 group of rich and emerging nations this year and has stressed that tougher rules must be coordinated globally to prevent one region from being disadvantaged.

BROWN HITS BACK

Prime Minister Gordon Brown dismissed claims from the opposition centre-right Conservatives that Britain had lost out in the division of roles in the EU's executive commission.It is British proposals, British influence, British policies that are making a difference. That is the advantage of being at the heart of Europe, Brown told the British parliament during his weekly question time session.

Briton Catherine Ashton has been nominated to the new post of EU foreign policy chief in the shake-up.

Darling said that new rules on financial regulation must not undermine the functioning of the single European market.

He said national supervisors, such as the Financial Services Authority (FSA), must remain responsible for supervising individual companies.

As we agreed in June, decisions taken by the new European supervisory authorities should not impact on national budgets, Darling said, repeating British opposition to having to help pay for bail-outs ordered by the EU.

In the forthcoming reform of hedge funds, private equity and derivatives, Jose Manuel Barroso, the European Commission president, and Mr Barnier will be mindful that Europe is not competing with itself, but striving for global excellence, Darling wrote.

(Additional reporting by William James; editing by Stephen Nisbet/Ruth Pitchford)

Join the Discussion