THE UK is embroiled in a “vociferous” dispute with Brussels over regulations that would prevent the government from implementing its flagship banking and regulatory policies.
At a committee of MPs and lords, chancellor George Osborne (pictured) admitted that he is concerned about current EU proposals on capital rules, which would make it impossible for the UK to put in place its new macro-prudential regulator and to implement recommendations made by the Vickers Commission on banking.
“There’s clearly an area of concern that the potential directive in this area does not provide sufficient discretion... to put in place macro-prudential tools and run something like certain Vickers arrangements,” said Osborne. “We’ve made our point very vociferously,” he added.
The flashpoint over capital rules adds to a growing pile of issues on which Britain is at loggerheads with Brussels. HM Treasury is embroiled in a legal dispute with the ECB over clearing house rules and said it could also sue over powers given to the European Securities & Markets Authority (ESMA).
Osborne’s admission comes after City A.M. revealed that the Treasury thinks the EU’s current position makes its policies “subject to legal challenge” unless there are significant changes to the draft rules being discussed.