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UK to block EU market regulation | UK to block EU market regulation |
(about 5 hours later) | |
The UK finance minister, Alistair Darling, is trying to block attempts to centralise the regulation of European Union (EU) financial markets. | The UK finance minister, Alistair Darling, is trying to block attempts to centralise the regulation of European Union (EU) financial markets. |
Italian finance minister, Tommaso Padoa-Schioppa wants the EU to introduce a single new rule book. | |
But Mr Darling wants minor changes to the current system, which encourages co-operation between regulators in the individual member states. | But Mr Darling wants minor changes to the current system, which encourages co-operation between regulators in the individual member states. |
The reforms are being discussed by EU finance ministers meeting in Brussels. | The reforms are being discussed by EU finance ministers meeting in Brussels. |
The Italian proposals are a particular problem for the UK, which has built London as a leading financial centre using a "light-touch principles-based" approach to regulation. | The Italian proposals are a particular problem for the UK, which has built London as a leading financial centre using a "light-touch principles-based" approach to regulation. |
Mr Darling is hoping for German backing - the two countries host 55% of Europe's wholesale financial markets between them. | Mr Darling is hoping for German backing - the two countries host 55% of Europe's wholesale financial markets between them. |
Four-stage process | Four-stage process |
Current arrangements are known as the Lamfalussy system, named after Alexandre Lamfalussy, the central banker who chaired the committee that introduced them in 2001. | Current arrangements are known as the Lamfalussy system, named after Alexandre Lamfalussy, the central banker who chaired the committee that introduced them in 2001. |
The idea behind the system was that by encouraging national regulators to co-operate it would provide the same benefits as having a single overall EU regulator without the difficulties of getting it to fit all nations and take into account the varied conditions in individual countries. | The idea behind the system was that by encouraging national regulators to co-operate it would provide the same benefits as having a single overall EU regulator without the difficulties of getting it to fit all nations and take into account the varied conditions in individual countries. |
The Lamfalussy system is a four-stage process by which financial services regulation is drafted and implemented. | The Lamfalussy system is a four-stage process by which financial services regulation is drafted and implemented. |
Tuesday's discussions are centred on step three, which would involve setting up a committee of national regulators to advise on any new rules. | Tuesday's discussions are centred on step three, which would involve setting up a committee of national regulators to advise on any new rules. |
There have been some suggestions that this stage might be replaced with a European super-regulator. | There have been some suggestions that this stage might be replaced with a European super-regulator. |
In a statement, the UK Treasury said it, "supports a series of practical measures to increase the efficiency and effectiveness of the supervisory process, but opposes wholesale reform". | In a statement, the UK Treasury said it, "supports a series of practical measures to increase the efficiency and effectiveness of the supervisory process, but opposes wholesale reform". |
They come only a month after the introduction of the Markets in Financial Instruments Directive (Mifid), which is designed to make it easier to buy shares from another EU country. | They come only a month after the introduction of the Markets in Financial Instruments Directive (Mifid), which is designed to make it easier to buy shares from another EU country. |
Just as Mifid is supposed to make it easier to trade across European borders, the Italian proposals are meant to simplify the regulations facing multi-national financial companies. | Just as Mifid is supposed to make it easier to trade across European borders, the Italian proposals are meant to simplify the regulations facing multi-national financial companies. |
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