The UK has managed to defeat a move to give the Paris based EU financial regulator ESMA (European Securities and Markets Authority) the power to decide who can act as a clearing house for over the counter (OTC) derivative trades.The Telegraph reports that George Osborne said that he has ‘made major achievements’ in pushing the European Market Infrastructure Regulation (EMIR) in the direction the UK wanted it to go.
With 75% of Europe’s OTC derivative trades going through London this was an important battle to win for the City.
But this is only part of the story with Germany and France both wanting a bigger slice of the overall European financial services pie. To do this they are pushing for the EU to have a much wider scope of powers to regulate all financial services activities within the EU, something the UK and the City will bitterly oppose.
George Osborne also said that he had negotiated hard for the concessions already made, but makes no mention of what he was forced to give a way in the process.
We should also remember that every fight on sovereign issues with the EU is just a temporary skirmish. That is until the EU has its way, then it is signed away, sealed and delivered to Brussels.
As we ponder our future in the EU we should realise that we will in the end be forced to ‘pool’ our financial services with the rest of the region, just like we do with what used to be ‘our’ fishing grounds for example.