Lord Mandelson calls for "sense of proportion" from the FSA

14 January 2010 4:38 pm | By Nicole Blackmore

Speaking at a business for new Europe event, Lord Mandelson said the Government supports the de Larosiere report, which proposed that the EU collectively defines regulation and member states independently implement and supervise.

He said: “Our own FSA has a duty to take a step back and introduce a sense of proportion. This is not to deny there is a need for more financial oversight and the regulation of risk. There is no point in defining the industry’s competitiveness by the lightness of its regulatory burden if that lack of governance means the system blows up and needs taxpayer rescue once a decade.

“We in the government think the balance struck on de Larosiere, where the EU collectively defines, and member states implement and supervise, is the right one. This makes prudential sense, this is the level at which markets and banking operate.”

Lord Mandelson admitted that initial attempts to form a coherent EU position “were badly flawed”.

He said: “Parts of the Alternative Investment Fund Managers Directive read more like a long standing grudge against the hedge fund industry than a serious attempt to address systemic risk.

“Most other member states understand on principle the fact that the UK has more skin in this game than the rest of the EU put together, and we expect that to be respected. Will need to work hard with the European Parliament to get a constructive outcome.”

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