Andrea Enria, chairman of the European Banking Authority, which polices how the national regulators across the EU implement rules set by Brussels, used the example of Norway and Iceland, which are not EU members but which are part of the broader European Economic Area, to explain what would happen if a vote for Brexit occurred in a referendum later this year.
“They apply the same rules and they don’t vote. That’s the reality,” said Mr Enria, who has begun his second term as head of the London-based EBA, which has just reached its fifth anniversary.
“The Brexit debate at the [EBA] table has already occurred,” said Mr Enria, an Italian-born former central banker who also headed the EBA’s predecessor. “There is already a protection that ensures there is no predominance, let’s say, of the euro area in the setting of rules for the single market.”
Citing the example of liquidity reforms, he adds that it is often the UK representative to the EBA — the Bank of England’s Prudential Regulation Authority — that has often been at the forefront of pushing for common rules. [...]
His second term — one that he says will emphasise implementation of current regulations rather than more rulemaking — coincides with a movement around the world that is pausing for breath on frenzied reforms put in place in the wake of the financial crisis. That includes a review initiated by Lord Hill on whether regulations are working or not. That leaves open the possibility of whether some of the reforms the EBA itself has implemented might be rolled back.
“If in applying the rules we realise that there are aspects that do not work as intended, we actually would like to be the first in asking for changes,” he says. “We don’t think the solution to the problems that we are seeing in Europe is watering down the current requirements. But we don’t deny that there could be a need for adjustments in the legislation.”
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