The latest UK draft on new settlement with the EU shows disagreement over the conditions for granting leeway to national regulators whose currencies are outside the euro zone, Reuters reports. The draft in question leaves a key section on financial regulation in square brackets, indicating it will be handled at the top political level.
UK plans to hold a referendum, with a possible date in June 2016, on whether to stay a member of the EU and the draft, which maps out a new deal with the EU, is aimed at persuading the country to stay in the 28-country bloc.
The draft says regulators outside the euro zone, such as the Bank of England in London, are responsible for supervision of their own banks and markets when it comes to preserving financial stability. But this is subject to two conditions which lawmakers in UK have said negates the freedom being offered.
The latest draft still says that a regulator such as the BoE must take into account the requirements of group supervision - a reference to the European Central Bank, which is the group supervisor for the euro zones top lenders which have operations in London.
Secondly, this is without prejudice to the development of the single rulebook and to the existing powers of the Union institutions and relevant Union bodies to take action that is necessary to respond to threats to financial stability, the draft text says, the source cites.
The ECB would be included in a list of relevant union bodies, adding to concerns over the scope for the BoE to regulate its own markets.
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