In a Treasury Select Committee session this week, Lord Myners said the Government did not agree with some of the draft proposals for the powers that a European Systemic Risk Board would hold, particularly that the Board would have the legal power to force the UK into taking actions such as bailing out banks in the event of another financial crisis.
The TSC raised concerns over this in an earlier session this week but leading economists played down these concerns saying there was no legal requirement to do this.
TSC deputy chairman Michael Fallon told Myners: “You are representing the member state with the biggest banking industry in Europe. How have we ended up with a draft directive that is so opposed to our own particular interests? Who is on the case here?”
Myners said: “The Chancellor’s statement reflects the position of the Government which is that the national supervisory authorities should have certain powers over the rating agencies but not over directly regulated entities within nations, and that is a position on which we have been very consistent. That is one of the elements of the draft with which we are not in agreement.
“That is why we are objecting to the current proposal from the Commission and want to hold to the line agreed with the European heads of state and the European Council in June that there can be no interventions which have fiscal consequences for individual national Governments. We have consistently held that view and will continue to do so.”