EU financial regulatory framework: an impressive achievement, but weaknesses remain
04/02/2015The report concludes that the three European Supervisory
Authorities (ESAs) have experienced a baptism of fire, but have
been responsible for much good work. Yet they are hampered by
several fundamental weaknesses, including a lack of authority,
independence, resources and influence over the legislative
process.
The most flawed of the legislative proposals were the result of political pressure to take action and/or to make the financial sector pay for the crisis. The Alternative Investment Fund Managers Directive (AIFMD), the bank remuneration provisions in the Capital Requirements Directive (CRD IV) and the contentious plans for a Financial Transaction Tax are three cases in point. Yet they are exceptions. The Committee found that the bulk of the new regulatory framework was necessary and proportionate, and would have been implemented by the UK even if action had not been taken at the EU level.
The UK has the largest financial sector in the EU, and the implications of these reforms for this country are therefore immense. Yet the Committee finds that the UK’s influence over the EU financial services agenda is diminishing. It calls on the Government and all UK authorities to take urgent steps to correct this. The prosperity of the City of London, and the financial services industry it hosts, is in the interests not only of the UK but of the EU as a whole.
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The most flawed of the legislative proposals were the result of political pressure to take action and/or to make the financial sector pay for the crisis. The Alternative Investment Fund Managers Directive (AIFMD), the bank remuneration provisions in the Capital Requirements Directive (CRD IV) and the contentious plans for a Financial Transaction Tax are three cases in point. Yet they are exceptions. The Committee found that the bulk of the new regulatory framework was necessary and proportionate, and would have been implemented by the UK even if action had not been taken at the EU level.
The UK and EU Financial Services Agenda
The Committee criticises the belated recognition of the importance of the growth agenda. It welcomes proposals for an Investment Plan for Europe and for a Capital Markets Union. Yet the responsibility for promoting growth and prosperity lies not only with the Commission but with every Member State.The UK has the largest financial sector in the EU, and the implications of these reforms for this country are therefore immense. Yet the Committee finds that the UK’s influence over the EU financial services agenda is diminishing. It calls on the Government and all UK authorities to take urgent steps to correct this. The prosperity of the City of London, and the financial services industry it hosts, is in the interests not only of the UK but of the EU as a whole.
THIS E-MAIL AND ANY ATTACHED FILES ARE CONFIDENTIAL AND MAY BE LEGALLY PRIVILEGED. If you are not the addressee, any disclosure, reproduction, copying, distribution or other dissemination or use of this communication is strictly prohibited. If you have received this transmission in error please notify the sender immediately and then delete this e-mail. Opinions, advice or facts included in this message are given without any warranties or intention to enter into a contractual relationship with the City of London unless specifically indicated otherwise by agreement, letter or facsimile signed by a City of London authorised signatory. Any part of this e-mail which is purely personal in nature is not authorised by the City of London. All e-mail through the City of London's gateway is potentially the subject of monitoring. All liability for errors and viruses is excluded. Please note that in so far as the City of London falls within the scope of the Freedom of Information Act 2000 or the Environmental Information Regulations 2004, it may need to disclose this e-mail. Website: http://www.cityoflondon.gov.uk