Barnier pushes reform agenda, seeks to calm London’s fears
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The new European commissioner in charge of financial services, Michel Barnier, pushed a regulatory reform agenda at the EU Wednesday, while attempting to calms fears in London, promising “intelligent regulation”.
AFP - France's Michel Barnier, nominated as Europe's new financial services overlord, pushed a new regulatory reform agenda on Wednesday all the while seeking to reassure London financial circles.
"We have to learn the lesson of the crisis, and we are going to learn them," Barnier told European parliament lawmakers during a confirmation hearing in Brussels.
"We have to reverse the trend, in the interest of the financial services industry itself," added the man French President Nicolas Sarkozy controversially declared the big winner of the European Union's top jobs merry-go-round.
Barnier set out proposals to regulate derivatives and impose tougher rules on bank capital requirements, articulating an approach designed to protect ordinary European citizens as much as the sector's big global players.
"I don't want us to provoke an exit" from Europe for such an important industry, he stressed, promising to take "precautions" and put in place "intelligent regulation."
"But we are going to reform. We need this regulation."
London is home to 80 percent of Europe's financial services funds -- at least until tax rises that form part of a British general election campaign kick in.
Barnier has been on the defensive right from the moment he was picked amid a complicated political trade-off last month, seeking to balance lawmakers' demands that Brussels act to curb traders' excesses while reassuring those companies he is not too anti-free market.
Even before Sarkozy termed the British government the "big losers," Barnier appointed an Englishman, Jonathan Faull, previously running the commission's justice and home affairs department day-to-day, as his right-hand man.
Home to half a billion people and the world's biggest trading bloc, Europe's single market is due for major modernisation to tackle both protectionism and the age of digital commerce.
Barnier has sought to distance himself from accusations he is driven by an interventionist ideology and can point to a joint call to arms by Sarkozy and Britain's Prime Minister Gordon Brown to tax bankers' bonuses.
Barnier echoed that call directly when he said he would propose a "social business act," but stressed: "Do not be in any doubt: I will not take orders, neither from Paris nor from London. My roadmap will be that of the G20."
Of derivatives, the former French foreign and farming minister said as much as 85 percent of these highly speculative products "escape all control" and vowed that "progressively, these proportions will have to be turned around."
Stricter bank capital funds underpinning investment activities and lending would also be proposed "at the end of this year," he said.
Perhaps the biggest change from the approach of his predecessor, Irishman Charlie McCreevy, was a call to restore a "human and social dimension" to policing of the sector, notably targeting "social dumping," or the human cost of mercurial capital flows.
"I have no intention of tying my name and my actions to anything that could provoke social regression," he said.
"Today we heard clearly a different vision from that of Mr. McCreevy, one we want to ascribe to," said the Greens' Pascal Canfin.
"But we will pay close attention to ensure these are not only words and that they translate into action," Canfin said.
German socialist MEP Evelyne Gebhardt said Barnier came across as a "European commissioner with a European vision, which feels good."