Stalemate in financial sector row

THE battle between member states and MEPs over how to supervise the financial sector reached a stalemate in the European Parliament.

It is still possible to have the new supervisory architecture in place at the beginning of next year, but it will require tough negotiating and compromises.

The battle is over the power the new EU agencies should have and how much will stay in the hands of national agencies.

Britain in particular is fearful of the new cross-border authorities and would prefer that supervision of the London financial centre would remain largely with the national body.

But leading the debate in the parliament, former Belgium prime minister, Guy Verhofstadt made it clear he was not for turning. “No agreement is possible with the 27 (member states) if we cannot establish European oversight authorities,” he said.

To strengthen the hand of their negotiators, MEPs voted on amendments to the draft legislation but put off voting on the overall bill. They voted to give powers to the three European Supervisory Authorities (ESA) that will control practices in banking, securities and markets and insurance.