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EU’s financial regulation power grab is criticised by City minister

The City minister has hit out at proposals in Brussels to beef up regulation of financial markets, which could burden the City of London with more red tape after Brexit.
The EU is finalising proposals that would give its regulators a raft of new powers, including the right to raid financial services firms in Britain during any transition period.
The three watchdogs, the European Supervisory Authorities (ESAs), will be given extra firepower at a time when Britain will be stripped of EU voting rights and be powerless to stop the changes. The extra cash is set to be levied in large part from City firms.
John Glen, a minister in the Treasury, criticised the EU’s “one-size-fits” approach in a letter sent to MPs on the European Scrutiny Committee last week. “We do not believe broad-brush centralisation of power is an effective tool to deliver supervisory convergence,” Mr Glen said.
Mr Glen said it was a Government “priority” to determine whether the powers would apply during any Brexit transition period. “This is an ongoing negotiation,” he added.
He also criticised the ESAs’ lack of accountability to national parliaments and the proposal that the European Commission nominate its executive board members.
EU’s financial regulation power grab is criticised by City minister

Chancellor Philip Hammond is expected to make a speech on securing a Brexit deal for the City this week

Credit:
REUTERS/Hannah McKay
The comments come ahead of a speech by Philip Hammond, the Chancellor, expected this week which will set out the Government’s negotiating position for securing a trade deal for the City. The Treasury is set to push for a bespoke deal on financial services with the EU to keep crucial cross-Channel trade open after Brexit.
On Friday, Theresa May ruled out seeking a continuation of City firms’ current “passporting rights”, which provide full access to EU markets.
Mr Hammond is set to back a compromise position, known as “mutual regulatory recognition”, which is designed to retain as wide access as possible and has the support of the City.
The proposed system would ensure both sides base their financial regulations on the same principles, with an independent tribunal put in place to resolve any disputes.
However, Michel Barnier, the EU’s chief negotiator, has repeatedly ruled out a Brexit deal that includes financial services.
The Government argues this is a negotiating ploy it expects Brussels to ultimately drop.
Finance lobby group TheCityUK said on Friday there was a “clear and pressing desire on both sides of the Channel to get a deal”.
Both the Bank of England and consultant EY have estimated around 10,000 City jobs could go on day one of Brexit if no deal is agreed.
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