| EU to house banking watchdog in London Tue 20 January, 2004 17:34 LONDON (Reuters) - European Union finance ministers have agreed to locate two new financial regulatory committees in London and Frankfurt, in a blow to the EU Commission which had wanted to put them in Brussels. Disagreement about which European capital should house the watchdog groups had put a brake on the plans aimed at closer cooperation between supervisors to prevent financial crises. The Commission had proposed locating all the committees -- on banking, insurance and securities -- in Brussels. But in a deal reached by finance ministers in Brussels on Tuesday, the committee on banking supervision will be in London, insurance will be in Frankfurt while an existing securities authority will remain in Paris. British Chancellor of the Exchequer Gordon Brown hailed the agreement as a "major step forward for improving financial services in Europe and ensuring Europe keeps pace with financial market developments." "This agreement recognises London's role as a centre for banking expertise and demonstrates that the UK is at the heart of efforts to build an integrated financial market in Europe," he said. Treasury officials said Britain and other countries had been working hard on getting a deal through and had managed to reach one "which is good for the City of London and is good for Europe as a whole." The reaction in Germany was more muted. "Naturally we would have preferred to see the banking committee in Frankfurt, the home of the European Central Bank," Manfred Weber, secretary general of the BdB banking federation, said in a statement. "However, the insurance committee is also a big win for the financial centre," Weber said. Brown and German Finance Minister Hans Eichel launched a joint initiative to set up the committees after Alexandre Lamfalussy, a former president of the European Monetary Institute, proposed that detailed regulatory work be delegated to experts in order to speed up the EU's legislative process. See also European Shadow Financial Regulatory Committee |
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