23 January 2012

Commissioner Barnier: The EU needs the UK and the UK needs the EU

On the UK vs the EU he said:

Why safeguards are not necessary?

“Contrary to what I often read, there is no plot. No plot to undermine the City. No plot to boost Paris or Frankfurt at the expense of the City. I have been the European Commissioner for financial services for two years now. We have managed to work together. And not once has the UK been outvoted on rules affecting the City. It has not always been easy. There have been compromises on all sides. But we have managed. A few examples: the rules on pay in the banking sector, new supervisory rules for credit rating agencies and rules on short selling and credit default swaps.”

On the European supervisory authorities, Barnier said that it is in the City's interest to have the same rules for banks and financial institutions everywhere in Europe. It makes it easier for financial institutions to operate across the EU. And to benefit from the size and scale of the single market. 500 million consumers, 22 million companies.

There is a need implement basic banking rules for all. The three European Supervisory Authorities – including the European Banking Authority here in London – have been working for a year now. Their powers are tightly framed in European law. They do not replace national supervisors, which still do the day-to-day supervisory work. Cross-border banks, insurance companies, hedge funds: all are still supervised nationally. But with colleges of supervisors where appropriate. And with coordination from the European Supervisory Authorities. 

Such EU level coordination and supervision is essential

On Capital requirements, Barnier said that the EC proposals strike the right balance between common standards for all, in the interest of both consumers and banks, and flexibility to adapt to national specific requirements.

Barnier clarified that the FTT is not part of his financial regulatory agenda, but he believes it to be feasible. It is right that the financial sector - massively bailed out by taxpayers - pays a fair contribution to help Europe face up to global challenges. He stressed: “At the end of the day, the FTT won't be imposed on the UK against its will”. 

He presented the following initiatives to be presented in 2012.

1. Possible structural measures for the banking sector:

As you know, we are setting up a high level group of experts to consider this issue in-depth. The group will be headed by Erkki LIIKANEN, Governor of Finland’s national bank. The Group will look at the work carried out in the EU and elsewhere. It can be seen as a tribute to the influence of the Vickers Commission in the UK. But – and this is an important but – do not assume that the conclusion of this thinking means reproducing the UK approach to the EU as a whole. I have a very open mind. No one should prejudge the outcome of the Group’s work.

2. Shadow banking.

3. To focus on consumers:

Disclosure rules for retail investment products (so-called "PRIPS"). To make sure that consumers have access to clear and comparable information about investment opportunities;

A review of the UCITS Directive which will, among other things, strengthen depositaries' liability;

And we will review the Insurance Mediation Directive to improve consumer protection standards for insurance products;

4. Financial regulation to stimulate growth.

Full speech

© European Commission