Yahoo Finance EU toughens financial supervision to stop ‘dodgy business’ from UK after Brexit
The mistrust between Brussels and London has been laid bare as MEPs backed new reforms over financial services to stop the City exploiting Brexit to do “dodgy business.”
The regulations backed by the European parliament are designed to British businesses cannot gain a competitive advantage over their continental rivals by undercutting EU regulations.
The parliament’s economic and monetary affairs committee voted on Thursday to give more powers and funding to the bodies which oversee financial services.
Brexit was cited as the main motivation for the reforms by Othmar Karas, the Austrian MEP who led the legislation through parliament.
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“We want the European Financial Market Supervision to be stronger and more efficient and to meet the challenges of Brexit, digitisation and money laundering,” he said.
“The purpose of financial markets is to create investments, jobs and growth. The reform aims at making sure this really happens.
“Decision making procedures will be streamlined, bureaucracy and redundancies will be reduced, certain cross border activities will be directly supervised at EU-level and the authorities will be accountable to the European parliament.
“European Financial Market Supervision will also receive stronger cut-through rights with respect to third countries.
“This is necessary to make sure that the Brits, once they are out, do not start to do dodgy business in the EU with weakened rules. We will make sure that whoever does financial business in the EU has to obey our strict rules.”
The European System of Financial Supervision, a network of four EU bodies, was introduced in 2010 in response to the financial crisis.
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It is designed to “strengthen financial supervision, better protect European citizens and ultimately rebuild trust in the EU financial system”, according to the commission.
The reforms backed by the MEPs were first proposed by the European commission last September and will now need to be accepted by member states before being implemented.
“The reforms will promote further capital market integration following the UK’s departure from the EU,” said the commission’s statement at the time.
“They will also introduce changes to the supervisory relations with non-EU countries so as to ensure proper management of all financial-sector risks.”
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