Speaking at a Business for New Europe event, Mandelson said the Government supports the de Larosiere report, which proposes the EU collectively defines regulation which 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.”
Mandelson admitted that initial attempts to form a coherent EU position “were badly flawed”.
He said: “Parts of the alternative invesment 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.”
Cicero director Iain Anderson says: “Lord Mandelson’s speech makes the point there are still some UK politicians calling for a singe EU structure but the big question is who will win the general election because the Conservatives have a very different approach to EU regulation.”