Juncker considers creating financial services tsar
A new EU financial services tsar charged with regulating the City of London and ensuring financial stability in the region would be appointed in Brussels under new plans being considered by Jean-Claude Juncker, the incoming European Commission president. Mr Juncker is weighing the creation of a powerful standalone finance directorate, which some London-based banks fear will tilt wider EU financial policy towards the eurozone. The plans to give a single commissioner a united financial services portfolio comes at a critical time for the industry, with the commission implementing a large number of post-crisis financial reforms as Europe’s banking union finds its feet. At present EU financial regulation is overseen by Michel Barnier, the internal market commissioner and former French foreign minister. While finance reform has dominated his workload, he was also responsible for developing the 28-nation common market, covering issues ranging from copyright rules to licenses for ski instructors. Senior officials say the new finance directorate would probably move banking and markets units from Mr Barnier’s department, and combine them with the financial stability unit stripped from the department for Economic and Financial Affair. Carving out another coveted senior job increases Mr Juncker’s options as he attempts the near-impossible task of divvying up commission portfolios without offending member states vying for influential posts. There remains doubt over the exact form of the new department and a final decision has yet to be taken. Detailed plans were drawn up five years ago to separate financial services from the internal market portfolio but were ditched at the last moment. No frontrunner has yet emerged for the job but potential candidates include Jyrki Katainen, the former Finnish prime minister, Jeroen Dijsselbloem, the Dutch finance minister, and Valdis Dombrovskis, the former Latvian prime minister. Banks fear that without an anchor in the department for the single market, financial services rulemaking would be skewed towards the demands of the eurozone. While euro area states often disagree on policy, as a group they will soon wield an effective majority to pass laws over the objections of non-euro states. In a recent internal analysis paper on "eurozone caucusing", the British Bankers' Association said it was "of utmost importance to maintain the structure of the relevant commission services dealing with financial services so that their work is permeated with the priority of preserving the single market focus". "We suggest that the UK government should proactively defend the unity of [the internal market directorate] and oppose any plan to move financial services units out of it," the report added. Others see the reconfiguration as a way to focus the commission more effectively. Nicolas Véron of the Peterson Institute think-tank sees "little synergy between financial services and the rest of the internal market" and argues the cohabitation meant single market work was neglected during the financial crisis. While British officials are alive to the risks of the new financial services commissioner favouring the eurozone, they are relieved the finance portfolio is not being handed to the economic affairs commissioner, whose work is heavily dominated by the euro area.