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EU rules will not diminish London banks’ strength – Barnier

  • 17/10/2013
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European commissioner Michel Barnier has assured UK banks new EU legislation will not cause a power shift away from London.

Plans are being discussed to create a banking union which would see a new watchdog monitor financial institutions across the 17 eurozone countries.

Some believe this will increase the pressure on the City of London but Barnier, speaking at the BBA conference, said the new rules would not affect the city’s standing in Europe.

“Banking union is a crucial project for stability and growth. Not only in the euro area but in the EU as a whole. We all need a strong and stable Europe, and strong and stable euro area banks.

“But rest assured we have no interest in undermining the UK, no interest in threatening London’s place as the largest European financial centre.

“I want to strengthen the single market, not weaken it.”

Other regulation such as the EU mortgage credit directive has caused controversy by trying to extend a single regulatory framework across Europe’s varied nations. Barnier insisted additional controls are still needed.

“The financial crisis was caused, in part, by excessive risk taking and inadequate risk governance,” he said “We’ve improved the existing framework to help restore people’s confidence in the financial sector.

“This is about ensuring banks manage risks and remain prudentially sound.

“There may still be banks that are too big to fail and too complex to resolve. That is why we are working on a common framework on the structural reform of banks and plan to come forward with a proposal in the coming weeks.”

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