The European Union (EU) finance ministers on Tuesday shied away from radical changes to the current coordinated approach in financial supervision, rejecting the idea of a pan-European regulator.
Learning from the recent financial turmoil, which was triggered by the U.S. sub-prime mortgage crisis this summer, some EU member states led by Italy wanted to see a more harmonized approach on the European level in supervision of the financial markets.
Under the current system, bank supervision is the responsibility of national bodies, which act in their own country's national interest. EU member states do cooperate with each other under the so-called Lamfalussy process, a four-layer approach under which EU financial services regulation is drafted and implemented.
As EU finance ministers met Tuesday for their regular monthly meeting, their discussions were centered on the third level, where national regulators work on coordinating new regulations with other member states in an informal "collegiate" way. There had been suggestions to replace the third level with a single EU regulator to ensure convergence of national rules.
However, Italian Minister of Economy and Finance Tommaso Padoa-Schioppa said he failed to win support for any radical changes to the current system due to opposition from Britain and Germany.
"The UK doubts have philosophical, political, institutional grounds," he said at a news conference, "From the point of view of the London financial business, such an outcome would not be desirable."
As one of the global financial powers, Britain has adopted a "light-touch principles-based" approach to regulation, which proved quite successful. London is afraid rules from Brussels may undermine its position.
Alistair Darling, British Chancellor of the Exchequer, made it clear ahead of Tuesday's meeting that he would reject any moves towards a "one size fits all" regulatory approach.
Commenting on the conclusions adopted by the EU finance ministers, a spokesman for Darling said Britain's position was shared by several other countries including Germany, Spain and Finland.
"In line with the conclusions agreed, the discussion showed support for an evolution in the system, not a revolution," the spokesman said.
Source: Xinhua
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