The Department for Business Innovation & Skills published on 14 January 2010 a speech made by Lord Mandelson at the Business for New Europe Event. In his speech, Lord Mandelson discussed the EU agenda for financial regulation in the aftermath of the economic crisis.

Lord Mandelson, commenting on the UK government’s stance to new EU regulation, stated that “there is a compelling case for moving the basic level of the design of financial markets regulation – although not its implementation or supervision – to the level of the Single Market. We in the government think the balance struck on de Larosiere, where the EU collectively defines, and Member States implement and supervise, is the right one. This makes prudential sense – this is the level at which markets and banking operate.”

Highlighting the government’s rationale for an EU wide approach, Lord Mandelson also highlighted that “a coherent EU position also gives us much greater weight in shaping a new global regime through the G20 process. It also makes commercial sense. I don’t see how the UK can detach itself from a single European regulatory regime. If it wants to be the main capital and financial markets centre for the single market and if we want to be the main route or centre for investment into the single market, it doesn’t make sense to detach ourselves from a single coherent European system.”

Lord Mandelson accepted in his speech that certain initial attempts at EU financial regulation have been badly flawed, such as parts of the Alternative Investment Fund Managers Directive which seem “more like a long standing grudge against the hedge fund industry than a serious attempt to address systemic risk”. However, on a more positive point, Lord Mandelson said that “most other member states understand in principle the fact that the UK has more skin in this game than the rest of the EU put together, and we expect that to be respected. We will need to work hard with the European Parliament to get a constructive outcome”.

To view the full summary of Lord Mandelson’s speech, please click here