His comments came at the FSA’s asset management conference follow an agreement earlier this month on the creation by the European Union of a set of regulators to oversee the region’s banks, insurers, pension funds and broader financial markets, the Telegraph reports.
“We are clear the fundamental process of supervision has to occur where expertise is, with the national authorities,” said Lord Turner.
The three European Supervision Authorities (ESA), which will be established at the start of next year, will oversee the implementation of EU financial rules by regulators in individual member states and will have powers to intervene in financial markets.
Lord Turner’s comments are the first hint of tensions between the new regulators and existing domestic bodies, according to the Telegraph.
His comments came as the EU looked to have reached a breakthrough on new regulation for the private equity and hedge fund industry.
The directive is likely to restrict the way funds from outside the EU can market their products within the region, as well as introduce new disclosure rules.
Lord Turner noted the dangers to British interests, saying that it was important the AIFM should recognise “the global nature of the industry” and allow professional investors based in Europe to continue putting their money into alternative investment funds.
Fund managers who are structured as limited liability partnerships are likely to face particular difficulties as a result of the rules,” he said.
The FSA has already said it intends to apply the rules as broadly as possible but this will be determined by guidelines published next month by the Committee of European Banking Supervisors.
