There is lots wrong with this view of last week’s acrimonious summit negotiations. For a start, Cameron’s motivations were as much about avoiding a national referendum – and thus keeping his own Conservative –Liberal Democrat coalition alive – as they were about the City of London. The City itself is deeply divided over the issue of financial regulation: some would prefer to keep clear of European harmonization efforts and to go it alone (for a list of all the financial market reforms in the EU pipeline, see here). Others in the City say very clearly that a common European regulatory regime of which the City of London is a part would be better than a split. We should also have no illusions about the motivations of European financial regulators: the political push behind this regulation, led by the European Commissioner for internal market and services, the Frenchman Michel Barnier, comes from the French and the Germans and is driven by competition between national capitals. The goal is to weaken the City of London as a financial center as much as it is to reform European finance. Why side with one over the other in this struggle if not out of German, French or Euro-chauvinism?
Monday, December 12, 2011
The Purposes of Financial Regulation
The Current Moment has a shrewd comment on the split at Brussels over financial regulation: