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Economic Secretary and City Minister Kitty Ussher rejected a one-size-fits-all regulatory approach or pan-European regulator for financial services, saying that either would not have the flexibility needed to allow EU markets to prosper. Speaking to the Centre to European Reform she said that to legislate for a common method of regulation would create a massive and dislocating economic distortion rather than increased prosperity.
"I hope that we can make the Lamfalussy arrangements work more effectively in future”, Ms Ussher said. “We must avoid drifting towards a pan-European regulator that would be rigid and stifling”, she added.
As practical enhancements that can be made Ms Ussher proposed changes to follow two principles:
- That regulation and supervision should not be ends in themselves - but should aim to improve markets, and deliver economic benefits. To do that, they should be proportionate; support innovation, competition and efficiency; and promote financial stability.
- That regulation and supervision should recognise the need for regulators to be accountable - principally through their Ministers to national governments and parliaments.
"The revised Lamfalussy arrangements can continue to play a major part in strengthening the single market in financial services, benefiting businesses, consumers and our economies, while Europe will have another political and economic achievement to be proud of", Kitty Ussher said.