The headlines looked good for Britain. The European Central Bank (ecb) will become the overall bank regulator of only the 17 nations in the eurozone and other nations that opt in, under proposals unveiled September 12. Britain would receive the safeguards it wanted and would not be compelled to submit to the ecb.
But the small print tells a different story.
The Telegraph’s Bruno Waterfield points out that although Britain would be exempt from ecb oversight, it would continue to come under the European Banking Agency (eba), which the proposals strengthen. Here, an “independent panel” would receive “stronger decision making powers … on breaches of EU law and settlement of disagreements, and adapt rules on its composition accordingly.”
That’s not all. Currently the eba’s rulings are only accepted if approved by a majority of the 27 EU nations. The new proposal would reverse this—its rulings would be accepted by default, and only be overturned if a majority of EU nations voted to do so. This majority must include at least three countries inside the eurozone and three countries outside it. It means that if British banks are targeted, the country won’t be able to stop the eba’s action without the help of eurozone countries.
London’s financial services are vital to Britain. Ten percent of all of the government’s income comes from its taxes. One tenth of the nation’s economy is dedicated to financial services—a higher proportion than any other major nation. The sector employs over 1 million people. It is Britain’s only industry to consistently generate a large trade surplus.
By expanding the powers of a pan-European banking regulator, it is continuing the assault. The EU is still jealously eying Britain’s finance industry. It would love to see Frankfurt become the new center of European finance.
Full article: EU Body to Gain Power Over British Banks (The Trumpet)