BRUSSELS: European Union plans to help markets raise more funds for the economy play to London’s strengths as a global trading centre, the bloc’s financial services chief Jonathan Hill told leading bankers and dealers.
In his first speech to London’s financial community since his appointment to the European Commission last November, the former Conservative minister went out of his way to praise London for its ability to innovate and adapt to change.
Speaking in Canary Wharf, the Thames dockland home of several major banks and their regulator, he sought to reassure the sector that a wave of precautionary rules from Brussels since the financial crisis will ease on his watch.
His core project is a capital markets union (CMU) to increase the amount of funds raised by companies listing their shares or tapping investors directly.
“If we get capital markets union right then the companies and the people who work in these buildings in the old docklands can be, and be seen to be, the creators of prosperity for many millions across the continent,” Hill told a Reuters Newsmaker event at the London offices of media group Thomson Reuters.
His comments come just three weeks before national elections in Britain, with Conservative Prime Minister David Cameron promising a referendum on EU membership if he wins. Hill served in Cameron’s government as leader of the upper house of parliament until being nominated to the Brussels job last year.
Some policymakers are hoping the CMU — a project to clear away barriers to a single market in finance that would favour British exports — will help persuade eurosceptics, critical of Brussels’ sway over the City of London, to back staying in the EU and benefit from its free market.
Hill alluded to that: “The single market makes London a gateway for investment across the world into the whole European Union, the UK’s single biggest market for the export of its financial services,” he said.
“This is a centre of excellence that we need to support by maintaining financial stability and making sure that regulation is effective and internationally coherent.”
There will be fewer new laws and more focus on bedding down and reviewing, if need be, reforms of recent years, he said.
Many were surprised when European Commission chief Jean-Claude Juncker appointed Hill, a long-time confidant of Cameron, to the financial services portfolio after Cameron had tried to block Juncker’s own appointment. It pleased the City of London, which has welcomed a change of tone from his French predecessor, Michel Barnier, who was seen as more interventionist.
In his speech, Hill stressed that the EU was willing to tweak international bank capital rules the bloc signed up to, if it helps the capital markets union get off the ground.
“The EU should not be afraid to implement the international standards in a way that makes sense for Europe and Europe’s diverse financial landscape,” he said.
