Europe’s finance ministers head to a crucial meeting in Brussels this week to thrash out a deal on new rules that are meant to make the region’s banks safer, one of the key issues that sparked David Cameron’s “veto” of an EU treaty last December.
Ahead of the meeting, the UK’s full list of demands is revealed today as City A.M. publishes a 10-page Treasury document outlining Britain’s position on a the set of rules known as the Capital Requirements Directive IV or CRD IV.
The document shows that rather than “standing up for the City”, the UK is most concerned about retaining the ability to toughen up the rules hitting financial firms. And it is highly critical of attempts by other EU countries – understood to be led by France and Germany – to “[allow] less stringent prudential standards” and calls on Brussels to “[remove] the majority of options and discretions” in the rules. On the French demand that banks that own insurers retain a loophole: “Allowing Member States to continue using divergent approach is also inconsistent with the single rule book in banking... [it allows] dangerous double counting of capital between banks and insurance subsidiaries.”
The UK is also infuriated by France’s attempt to retain a loophole for banks that own insurers, allowing “double counting” of their capital reserves. But since Britain set out its position, which proved so unpopular in December, it has won the support of Spain, Poland, the Netherlands, the Czech Republic and Hungary in addition to that of Sweden.
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