Problems in banks spread quickly across borders. A single system of supervision for the euro area means reinforced application of rules and will result in more confidence. Enhanced stability will help tackle the current crisis and help to prevent future crises. It will mean added protection for UK banks – and the UK as a whole – against systemic risks. There will be strong safeguards for the UK: regulation will continue to be decided by all 27 EU member states. UK supervisors will remain responsible for supervising UK banks operating within the UK. They will continue to supervise UK banks operating elsewhere in the EU, as well as EU banks operating within the UK (along with supervisors from the other member states involved). Voting systems at the European Banking Authority will be changed so that euro area member states do not have an automatic and decisive majority.
Mark English is head of media at the European Commission in London.
Whenever Europe intervenes in this manner, competition declines, small companies are hit by regulatory costs, larger entities gain market share, innovation declines, jobs are lost and growth fades. This was the case for the decline in hedge fund start-ups since the Alternative Investment Fund Managers Directive and reductions in Independent Financial Advisers since the EU proposed Retail Distribution Review. These proposals mean that parliaments could not legislate on banking regulation without the ECB approval. The government has a veto on this. The question is whether they will use it, or whether they will continue to insist that we can claw back powers from the EU. It is hard to believe that having the ECB in charge will prevent future financial instability. If the combined intellectual powers of the SEC, FSA and Bundesbank were not able to prevent the crisis, what makes us believe that the ECB could?
Steven Woolfe is business spokesman for UKIP.