In the wake of a failure to reach agreement on proposed bank capital rules at a meeting of E.U. finance ministers that ended early Thursday morning, George Osborne, the British chancellor of the Exchecquer, was outspoken in his criticism of other ministers’ efforts to reach agreement and accused them of trying to weaken proposals to avoid another financial meltdown.
Reuters reported that Osborne said that proposed regulations under discussion could impair Europe’s credibility and also hurt London, the biggest financial center in the bloc. Specifically he criticized possible loopholes that would permit some banks to evade new capital requirements imposed by regulators. He was quoted saying about those loopholes, "I am not prepared to go out there and say something that is going to make me look like an idiot five minutes later.”
Osborne, along with the Swedish government, has been championing autonomy for E.U. member governments that would allow them to impose tougher requirements on banks for capital reserves. Both countries want to make it even harder for a repeat of the financial crisis to occur.
Michel Barnier, the EU commissioner in charge of financial regulation, has accused Osborne of seeking an opt-out by pushing for rules that would let the U.K. compel banks to carry higher capital reserves than other European countries.
France and other countries in the European Union worry that such a rule could make their banks seem less safe than U.K. banks and put them at a disadvantage to London. In addition, France wants capital standards to be more uniform across the E.U. while England seeks to maintain its authority over the City of London.
In the meeting, Osborne said, "I am not asking for some U.K. carve-out ... I will not be painted as somehow anti-European, demanding something especially for London."
Barnier, a former minister in the French government, said, "London is a very important center but ... there are other centers alongside London which also merit consideration."
Osborne refused to be cowed, saying, "People will listen to what I say ... I represent the largest financial center in Europe. You've got to allow me to sit down and go through the issues. You have not done that." He added that he had had to look for news on his mobile phone while he was kept waiting to take part in discussions that had by then gone on for 10 hours.