By Gonzalo Vina and Mark Deen Dec. 2 (Bloomberg) — Chancellor of the Exchequer Alistair Darling warned the European Union’s incoming financial-services regulator to tread carefully with rules to police markets, saying Europe will suffer if London’s leading position is hurt. “London, whether others like it or not, is New York’s only rival as a truly global financial center,” Darling said in an article in the Times published today. “No other center in Europe offers the same range of services. It is in all of Europe’s interests that they prosper alongside their close European partners.” The remarks are the first reply from a senior British politician to French President Nicolas Sarkozy’s claim that the U.K. was the “big loser” from last week’s appointment of Michel Barnier as the EU’s next Single Market Commissioner. Finance ministers are meeting in Brussels today to finalize new measures such as the creation of a single regulator for European financial institutions. Darling wants to prevent centers such as Paris, Frankfurt and “less regulated jurisdictions” from eroding London’s dominant role, while Sarkozy argues he’s trying to tame the market forces that sparked the financial crisis. The appointment of Barnier, a former French minister, “proves that Europe has taken the consequences of the crisis” into account, Sarkozy said yesterday in a speech in La-Seyne- sur-Mer, southern France. “The crisis has come from the drift of an Anglo-Saxon model. For the world, I want the victory of the European model, which has nothing to do with the excess of financial capitalism.” Conciliatory Barnier himself and French Finance Minister Christine Lagarde have struck a more conciliatory tone. Barnier said Nov. 27 he’s “ready to work with everyone” and doesn’t need to be convinced “of the importance of London as a financial center.” Lagarde told reporters in Brussels late yesterday it’s “clear” that the U.K. and “others” want to keep the power of a European authority over their banking systems “limited.” The U.K. today will press other European countries to make sure a June agreement that would prevent EU regulators from forcing national treasuries from bailing out banks won’t be watered down once it’s implemented. France’s Barnier, as the new commissioner, will be responsible for proposing EU rules covering banks and other financial-services companies throughout the EU. Barnier will take up his new duties after European Parliament confirmation, which could come in January. Competing With Self? Darling will today also urge EU Commission President Jose Manuel Barroso and Barnier to make sure rules to regulate hedge funds, private equity companies and derivatives markets don’t drive business away from London. “Europe is not competing with itself, but striving for global excellence,” Darling said in the article. The European Commission in September proposed a system of European regulators, including separate supervisory authorities for the banking, securities and insurance industries as well a European Systemic Risk Board to monitor macroeconomic risks. The commission has proposed laws to regulate the financial-services industry more closely following the most severe banking crisis since the Great Depression. “We must resist measures, however superficially alluring, that could undermine the effective functioning of our cherished single market,” Darling said. “National supervisors, such as the Financial Services Authority, must remain responsible for supervising individual companies. Making companies directly accountable to more than one authority is a recipe for confusion.” Euro-region ministers meeting late yesterday also said that Greece hasn’t done enough to cut its “worrying” budget deficit and faces new European Union demands in February on limiting the shortfall. — Editor: Jones Hayden , John Fraher To contact the reporter on this story: Gonzalo Vina in Brussels at gvina@bloomberg.net ;
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Darling Warns EU London Is New York’s Only Rival as Global Financial Power
