Syed Kamall MEP recently reported on EU regulation of the City:
Having made a scapegoat of the City – and with no willpower to establish a new regulatory framework which would eliminate the moral hazard of banks being too big to fail – the last Labour Government quietly handed over the keys to the City to the European Union…
In January the new authorities started operations, and it is only now that many in the City are waking up to the fact that their new masters no longer even reside in London…
This year we face a barrage of new legislation, justified by the Commission as necessary to ensure pan-European supervision of pan-European economic activity. In the spirit of politicians blaming bankers for their own failings, they are currently pushing through a new regulation on short selling and credit default swaps. The French Green MEP taking the lead on this dossier in Parliament wants a full ban on uncovered sovereign CDS and even wanted to extend this to corporate bonds. Little thought is given to the consequences of such measures – such as fewer cross border investments as investors can no longer cover their positions by short selling sovereign debt.
Last night, I pushed to a deferred division a related motion without debate in the Commons:
4 SHORT SELLING AND CERTAIN ASPECTS OF CREDIT DEFAULT SWAPS [No debate]
That this House takes note of European Union Document No. 13840/10 and Addenda 1 and 2, relating to the draft Regulation on Short Selling and certain aspects of Credit Default Swaps, and No. 7379/11, relating to the corresponding Opinion of the European Central Bank; and supports the Government’s position that proposals should not impact market efficiency and liquidity, in particular in relation to sovereign debt.
A number of us voted ‘no’ today but we shall see how many and who tomorrow. For the moment, as ever, it seems that in relation to the EU, resistance is futile.
As part of the Europe 2020 strategy for smart, sustainable and inclusive growth, Member States will submit a National Reform Programme outlining their structural reform plans in April every year. This, alongside Member States’ Stability and Convergence Programmes, will align reporting on fiscal and structural policies as part of the new EU surveillance structure known as the EU Semester.
What a mess.