Britain's international banks have warned against creating a single European financial watchdog, and have called on the EU to crack down on member states' different approaches to legal and accounting issues and takeovers.
The British Bankers' Association has told the EU that banks should be supervised by the lead regulator from the country where they are based, which would then co-ordinate regulation of the bank in other member states.
"Moves to introduce a single regulator in Europe would not only be disruptive but also could result in inappropriate compromises and a remote and unresponsive regulatory system," the BBA said in its proposals. A super-regulator would make little positive difference while adding an unwelcome further layer of regulation, it added.
The BBA is trying to shore up the UK's position as Europe's financial centre and head off attempts by other countries to capitalise on the shambolic response to the Northern Rock crisis. France, under President Nicolas Sarkozy, is seeking to build Paris into a rival to London as a financial hub.
International financial reporting standards (IFRS) are being undermined by European guidance that lets national banking supervisors ask for extra information, the BBA said. "National authorities should not be permitted to amend or add to the requirements of IFRS due to the cost, complexity and lack of clarity that will result," it said.
A proposed rule on contracts for consumer transactions could force banks operating in many jurisdictions to choose where to do business according to consumer protection legislation, the BBA said. A waiver for financial instruments should be extended to retail financial services as a whole, it added.
The BBA said the European Commission should ensure that cross-border mergers between EU banks are not prevented by restrictive regulation designed to protect domestic institutions or build up "national champions".
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