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New EU financial services chief flexible on rules

Published 29/09/2014, 13:56
New EU financial services chief flexible on rules

By Huw Jones

LONDON (Reuters) - New European Union rules making banks and markets safer could be swiftly tweaked to get right balance between effective regulation and encouraging funding to the economy, the bloc's new financial services chief said.

Jonathan Hill, a Briton who is due to start in November, said his priority after the huge regulatory change following the 2007-09 financial crisis will be to implement, enforce and evaluate the new rules.

Many are only now being rolled out.

"If during this process, evidence appears that we have not go it quite right, we should not be afraid to make quick and effective adjustments," Hill told the European Parliament in written comments published on Monday ahead of a hearing on Wednesday.

"In all we do, particularly given the challenges Europe faces on jobs and growth, we must get the complex balance right between effective regulation and increasing funding in our economy."

He will be questioned by lawmakers on parliament's economic affairs committee, some of whose members have been taken a tough stance towards bankers and will not want the rules to be watered down.

Banks are likely to welcome his comments, having argued that policymakers have yet to assess the combined impact of all the new rules on their ability to fund economic growth.

His nomination by incoming European Commission President Jean-Claude Juncker, sparked relief in Britain's financial district, but some lawmakers want the appointment scrapped.

He will oversee the euro zone's new banking union, triggering a debate over whether someone from outside the single currency area is appropriate. Parliament cannot formally veto individual commissioners but has in the past forced the withdrawal of several candidates.

"As European Commissioner, my job will be to build greater trust and confidence between the euro 'ins' and 'outs' in the interest of the European Union as a whole," Hill said.

Responsibility for policing banker bonuses has been removed from his remit, which could quell some of the opposition to him, and he pledged to uphold the EU law on bonuses, which caps them at no more than twice a banker's fixed salary.

Britain is challenging the cap in the bloc's top court with the outcome due by early 2015.

"If a member state does not comply with EU rules, or tries to circumvent them, I will ensure that full use will be made of the various enforcement tools available," Hill said.

Some eurosceptic members of Britain's parliament doubt Hill can shield London's financial district from more EU regulation. "He's got a poisoned chalice," Bill Cash told a meeting of the Bruges Group in London last week.

(Reporting by Huw Jones, editing by Louise Heavens)

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