MPs point to prudential problems
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The Treasury select committee says it has “serious problems” with the European Commission’s proposals for macro and micro-prudential financial regulation.
In its report on the proposals, select committee chairman and Labour MP John McFall says while the intention of the European proposals is widely welcomed, there is a great deal of concern about the detail, both within the TSC and from the evidence it has received from outside.
He says “There is still more unease about the timetable for agreement. The presidency is pressing for adoption of the proposals by Ecofin on December 2. We consider that is far too fast. The proposals will set in place a framework which should last for many decades, and there should be proper time for consideration, otherwise, this could end up as a recipe for a muddle.”
The report says the select committee has found serious cause for concern over the size and composition of the European Systemic Risk Board.
McFall says: “There is unease about the potential power they will have to override the decisions of national regulators.”
“We believe the proposals go far beyond the Ecofin agreement, and need to be reconsidered. Lord Myners indicated to the Treasury committee that he would be prepared to use his veto power if necessary.”
Royal London head of corporate affairs Gareth Evans says: “There does seem to be an unseemly rush to get all this stuff through. The European supervisory authorities would have the power to overrule national regulators. That is going to be quite concerning given that the UK financial services industry is sizeable and influential.”
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