UK will lose regulatory power to EU, says Myners

23 September 2010 | By Natalie Holt

Former City minister Lord Myners says the macro prudential failings that triggered the financial crisis will be dealt with by European regulators in future, rather than the new UK regulators.

Lord Myners appeared before the Treasury select committee last week as part of its inquiry into financial regulation. Labour MP for Streatham, Chuka Umunna, asked Myners whether he thinks the new UK regulatory structure would make the behaviours that triggered the financial crisis more or less likely.

Myners replied that he did not believe that the new Prudential Regulation Authority or Consumer Protection and Markets Authority would have any influence on issues such as risk management.

He said: “I do not think it will have a great influence on those behaviours at all. The new structure will be subservient to the Basel committee and the European directives on capital and liquidity. I would not expect the regulatory architecture to be tackling any of those issues.”

However, research by Cic- ero Consulting shows that only one in three members of the European Parliament support the creation of a single EU financial services regulator.

The Cicero and ComRes survey of 100 MEPs shows MEPs support greater financial supervision by the EU but only a minority agree there should be mandatory supervision of economic policies by Brussels.

However, there is support from MEPs for greater cross-border cooperation and information exchange between national regulators.

Lansons public affairs director Ralph Jackson says: “Myners’ comments and the research from Cicero are clearly at odds with each other but what is also at odds is the development of the EU regulatory structure with the changes to the UK regulatory structure. It will be the Treasury’s role to try to get that balance right.”

If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing