Treasury holds firm over new EU watchdogs

Tuesday, 7 September 2010 12:00 AM

By politics.co.uk staff

George Osborne is to rubber-stamp the creation of new European bodies tasked with regulating the banking sector at a meeting of European economic and finance ministers.

The chancellor is seeking to safeguard the details of a reform deal reached in Brussels last week shaking up the system of EU-wide oversight of the continent's banking, insurance and securities markets.

UK diplomats fear last week's agreement could be eroded by European parliamentarians seeking to reverse concessions made over issues like the term length of the chair of the proposed European Systemic Risk Board, the Financial Times newspaper reported.

Mr Osborne is expected to smooth over these last-minute problems as the new regulators receive backing. A Treasury spokesperson said the proposals were "a good deal for us".

Analysts point out London's prominent status as a major financial centre - and the British economy's greater reliance on financial services as a result - makes Mr Osborne's negotiating position more awkward.

Some, including the Open Europe thinktank, fear the chancellor could be leaving the City vulnerable to greater restrictions imposed from Brussels.

Mr Osborne is set to resist calls to set up an EU-wide levy on the banks which would potentially bypass national taxation, however.

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• economy and finance
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• eu economy
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• europe