Tuesday, 30 June 2009

The EU and 'City' Regulation

Despite the recent 'down-turn', Britain has by far the largest financial services sector in Europe. However, as a result of the latest EU agreements outlining financial services regulation, Britain will only have a small and ineffectual voice (as one of 27 members) in determining what precisely the new rules will be and how their supervision will take place.

The City of London has been pre-eminent as a financial and trading centre for more than 300 years, but as such it is dependent on the versatility of its fiscal and regulatory enviornment. As a result of this intrusive EU legislation, as well as the pending increase in the UK marginal tax rate to 51.5%, a significant number of firms are already murmuring and considering relocation to Switzerland or elsewhere.

The following article from 'The Times' confirms this handover of British financial regulation to the EU executive committee :