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Turner: More balance needed on Euro regulation

FSA chairman Lord Adair Turner will today warn that European regulation must comprise the right mix of financial integration and flexibility for national powers.

In a speech today at a Central Bank of Ireland conference in Dublin, Turner (pictured) will agree there is a “remorseless logic” to the argument that successful monetary union needs greater fiscal integration.

The International Monetary Fund has called for progress towards a pan-eurozone approach to issues such as the orderly wind-up of failed banks, compensation schemes and bank supervision.

But Turner will argue this needs to be tempered with the flexibility for countries to act on a national level where they feel it is necessary, pointing out recent credit and property booms were concentrated in specific countries of the eurozone but largely absent in Germany.

He will say small countries with large banking systems, such as Ireland, need to be able to set capital requirements above and beyond those dictated at a European level.

He will say: “As the IMF has argued in its latest Global Financial Stability Report, even if the path to a better system is inevitably a long one, the eurozone needs to set out a road map which leads to a sounder long-term design. That sounder design will need in some ways to be more integrated, but in some ways not.”

Turner will stress that the UK supported the creation of new pan-European regulators, known as European Supervisory Authorities, which will enforce financial services regulation across Europe and guard against the dangers posed by firms operating in one country and being based in another.

He will say: “At the European Union level we will therefore have to find ways forward – both in the arena of overall macroeconomic co-ordination and of financial stability – which achieve required integration within the euro area which do not seek to apply unnecessary integration to non-euro members, but which also maintain the level playing field of an EU 27 single market.

“Achieving that balance will be difficult, requiring careful institutional design. But success is essential.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Translation : ‘Please please please don’t take away any of MY power’.

  2. TOO MUCH Europe and TOO LITTLE GB in the minds of those who are supposed to be our betters.

    As if!

  3. “achieving that balance will be impossible” Fragmentation is inevitable, get ready for that rather than chasing a dream!

  4. Incompetent Regulators Award Team 27th April 2012 at 10:34 am

    Oh yes of course, let Europe follow our lead and bring the rest of their own countries down with mis-regulations.

    As the CEO of Tesco said, it can’t be right the regulatory industry is growing faster than business……

    Horse and cart come to mind here. Does he really know anything at all.

  5. Protectionism in th eextreme. He is protecting his own flawed position and his banking cronies. I don’t think that any E U legislation could be more disruptive than the FSA / FSC et-al.

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