City minister Lord Myners is concerned that the EU could force the UK to bail out banks in the event of a future financial crisis and intends to lobby against such powers being introduced.
At the Treasury select committee session last week, Lord Myners said the Government does 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 action such as bailing out banks in the event of another financial crisis.
TSC deputy chairman Conservative MP 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.”