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Darling refuses to accept EC financial system plans

CHANCELLOR Alistair Darling put the brakes on European Commission (EC) plans to bring in a new system of financial supervision yesterday.<br /><br />Darling has demanded an assurance that the plans would not lead to the EC being able to force extra fiscal costs on the UK.<br /><br />European lawmakers sought agreement at a routine meeting of finance ministers in Luxembourg for plans to set up a series of super-watchdogs as soon as next year, to prevent a repeat of the credit crunch by monitoring risky financial products such as derivatives. But the Treasury has objected to the plans, fearing the watchdogs would have the power to overrule UK regulators and insist the government fork out to boost bank balance sheets whether it wants to or not.<br /><br />&ldquo;There are a number of proposals which we can&rsquo;t accept,&rdquo; said Darling. &ldquo;This is work in progress. There are still a couple of difficult issues. If we can, we want to get it resolved by the end of the year.&rdquo;<br /><br />&ldquo;The bottom line for us is that we couldn&rsquo;t have a situation where a European supervisor could make an order to an institution in our country which could have fiscal consequences.&rdquo;