The British Bankers’ Association says the UK can not “cherry pick” EU financial services rules as it launched a robust defence of the single market.
The BBA was responding to the Government’s balance of competencies review where it asks for views on good and bad aspects of the EU.
Prime Minister David Cameron launched the review as part of his renegotiation of the UK ‘s role in the EU. He will hold an in/out referendum on the new relationship by 2017.
The trade body insisted the EU was crucial to the City of London, highlighting the “major contributing factor” of the single market to the success of UK financial services.
Conservative MPs, including former cabinet minister John Redwood, have called for EU financial services rules to repatriated. Cameron says he would like powers to be brought back in other areas such as social and employment laws.
The FreshStart group of more than 100 Conservative MPs is calling for a national veto on all financial services rules as Tory MPs push for greater autonomy.
The BBA response states: “While we are unconvinced there is a case for revisiting agreed settlements and cherry picking aspects of regulation for renegotiation, going forward we would encourage a greater focus on ensuring that action taken at EU level is justified, appropriate and necessary.”
The banking body’s reform proposals are based around the rule-making process. It called for better EU consultation over new financial rules with cost-benefit analyses, clear documents and regulators working more closely with affected groups.
The BBA suggested the EU was guilty of over-reaching in the single market in areas such as the mortgage market. Last year the EU finalised tough new rules on the mortgage market, which would have had far reaching UK impact before being watered down.
Economic and Monetary Affairs Committee chair Sharon Bowles backs the BBA response to not unpick existing rules.
She says: “The UK is the world’s largest exporter of financial services therefore the rest of the world expects us to have high standards. That said, there is no way we could expect to export to the rest of Europe if we do not subscribe to EU rules, a fact that significantly weakens the case for a UK exit.”
The UK investment industry has faced a tidal wave of EU regulation whether fresh consumer disclosure rules or the prospect of a fund manager bonus cap.