Brown cedes City oversight powers to EU
PRIME Minister Gordon Brown ceded some regulatory powers to the EU yesterday, but stopped short of giving it a direct role in policing Canada.
Brown backed plans for tougher cross-border supervision of banks, but insisted ultimate control had to rest with national governments.
Under plans being hammered out by EU nations three new European authorities will get binding powers to oversee cross-border banking, insurance and pensions, and securities sectors, and to mediate in disputes between member states.
These new bodies – the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority – will have the power to make recommendations.
But Brown said power must rest with the nations who will have to foot the bill of actions taken to rescue distressed financial institutions.
He said: “The fiscal authority in the case of Britain is Britain.”
The Prime Minister added: “At the end of the day it is the national authorities that will have to take the financial responsibility for dealing with the problems of an individual bank or an individual company.”
Brown also agreed to the creation of another EU body, the European Systemic Risks Council, which will sound the alarm for potential bank failures.
European supporters of this body say the regulator will be toothless unless it can dictate decisions.
But Brown was in a minority on this issue, with France leading the charge to push through the tougher version of the body.