THE “sheer scale and pace” of regulatory change in Europe could damage Britain’s financial services industry, a group of influential MPs will warn today.
In a report on financial regulation, the Treasury select committee said it was “concerned” about the “ambitious legislative programme taking place at the European level”.
The MPs dismissed claims from Michel Barnier, the EU internal markets commissioner, who said he was simply taking his lead from the G20.
Barnier supplied the committee with a list of 39 EU initiatives, but the MPs found that only 14 of the proposals were directly related to the G20 agenda.
The MPs also expressed alarm that Britain was under-represented on the EU’s three new “super-regulators”, which will regulate banking, the insurance and pensions industry, and markets.
“It is important that the UK, with a particularly large share of the financial services activity of the EU, secures appropriate representation on the EU regulatory bodies,” the MPs said in the report.
However, career policymakers from Portugal, Italy and the Netherlands have been appointed to run the bodies.
And the Treasury select committee’s report warned that political pressure could lead to “inappropriate regulation that will not only damage the UK, but the EU as a whole.”
Meanwhile, the report warned the British government not to rush its plans to scrap the discredited tri-partite system of financial regulation.
The government has said it will disband the FSA and hand its macro-prudential regulation powers to a unit of the Bank of England by 2012.
“The committee is concerned about the risks involved in such an ambitious timetable and the report underlines the importance of getting reform right,” the MPs said.