Lords EU Committee welcome European Council agreement on Banking Union but say 'the devil is in the detail'

13 December 2012

The House of Lords EU Sub-Committee on Economic and Financial Affairs yesterday published its report  European Banking Union: Key issues and challenges which called on the Government to ‘go into battle’ for the City to ensure that the UK’s decision not to participate in the European Banking Union did not marginalise the UK financial services industry.

The report also stressed the importance of ensuring that any steps towards Banking Union did not undermine the single market in the EU.

Following last night’s agreement in the European Council Lord Harrison, Chairman of the Lords EU Sub-Committee on Economic and Financial Affairs, said:

“We welcome news of the significant progress made overnight towards setting up a Single Supervisory Mechanism for eurozone banks. The agreement by EU Finance Ministers echoes closely the concerns expressed in our own report, in particular the need for a strong firewall between the ECB’s supervisory and monetary policy tasks, and the need for fair and equitable voting rights in the ECB and the EBA.

“The UK Government appear satisfied with the safeguards they have won in ensuring that the interests of the single market are defended. But the devil is in the detail. The implications of these important first steps towards banking union could be momentous for the UK, even though we will not be participating.

“We will be inviting the Minister to meet with us early in the new year to explore the ramifications of last night’s deal.”

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