Darling to fight finance changes
Tuesday, 04 Dec 2007 13:16
Alistair Darling is meeting fellow EU finance ministers
The chancellor is to reject a one-size fits all approach over the regulation of Europe's financial markets, Treasury officials have confirmed.
Alistair Darling is meeting fellow European finance ministers in Brussels today, with Italy expected to argue for new binding rules on European Union (EU) countries.
It is thought Italian finance minister Tommaso Padoa-Schioppa will use the meeting to press for a set of common EU standards for supervising financial institutions.
But Treasury officials say while the UK supports new practical measures to increase the efficiency and effectiveness of the supervisory process, it is opposed to a wholesale reform of the existing system.
Reports claim Mr Padoa-Schioppa raised concerns about the current regime in a letter to his fellow EU ministers, in which he said the recent turmoil on the world's financial markets had highlighted the shortcomings of the present approach.
He is expected to push for a change to existing rules during discussions over a review of the so-called Lamfalussy arrangements, which govern the regulation and supervision of EU financial markets.
Under the arrangements, established for securities in 2001 and extended to banking and insurance in 2004, national supervisors of financial institutions are able to co-operate on cross-border issues but respond flexibly to specific conditions in their home markets.
The Treasury has previously indicated it would not accept a pan-European financial market regulator.
In a speech to the Centre for European Reform last month, economic secretary to the Treasury Kitty Ussher explained: "To legislate for a common method of supervision, and fully harmonised rules, would create a massive and dislocating economic distortion that would – certainly in the short and medium term – act against the very aim of increased prosperity that we are trying to achieve."