Gordon Brown looks to have surrendered significant powers over the City of London to new bodies of European Union financial regulators, according to a high-ranking Brussels official.
According a draft EU summit communiqué,Brown has lost a battle to keep control of a powerful "Systemic Risk Board" (ESRB) out of the hands of the European Central Bank.
The ESRB will monitor potential threats to financial stability and, where necessary, issue risk warnings and recommendations for action and supervise their implementation. Britain had fought hard to ensure chairmanship of the new body was rotated among all EU countries but appears to have conceded control to eurozone countries.
"The members of the general council of the European Central Bank will elect the chair of the ESRB," the draft communique states.
Meeting in Brussels, EU leaders are agreed on Obama type oversight of banks and financial institutions. economy into its worst downturn for 70 years.
The proposals involve creating three pan-European watchdogs next year to ensure countries introduce new rules on supervision. Under the proposals, there is to be a European Banking Authority in London, an Insurance Authority in Frankfurt, and a Securities Authority in Paris. All European leaders agreed today to their creation.
The new bodies will have the authority to ensure European Union market laws are implemented similarly in every country.
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