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Govt wants FSA to rule UK in EU single market

The Government is pushing for the FSA to retain its powers within a single European market for financial services rather than contend with a supra-national regulator based in Brussels.

The single market has been made “an urgent priority” for the forthcoming Barcelona summit and the Government has published a White Paper on European economic reform.

In the White Paper, the Government sets its stall out for “mutual recognition over harmonisation” which advocates the maintenance of national regulation over centralised control from Brussels. The paper claims “regulatory competition in the EU can be a means to better regulation”.

It also says more needs to be done to highlight the benefits of reform and prioritise directives that will deliver the biggest benefits.

The paper argues that an integrated market for financial services would boost EU economies as well as providing consumers with increased choice in financial services.

The wording of the document closely follows a recent speech given in Brussels by FSA chairman Howard Davies to the European Commission.

But in Parliament last week, Shadow Chancellor Michael Howard criticised Chancellor Gordon Brown for not allowing Parliamentary time to debate the White Paper and for lecturing the EU on the need to reduce regulation at the same time as imposing burdens on business in this country.

IMA chief executive Sheila Nicoll says: “We want to improve cross-border business so we can get US-style econ-omies of scale. We are with the Chancellor on the mutual recognition side.”

Lobbyist Cicero Europe co-director Ben Gill says: “The commission is busy trying to overcome obstacles to a single financial market. All countries say they support the objectives but where these meet overriding national considerations, these win every time.

“In Europe, there is a concern about losing control – they have already lost power over their interest rates and currency.”

•Euro vision, p49

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