City hits back at Nicolas Sarkozy's attack on 'Anglo Saxons'

Published on Wednesday 2 December 2009 20:35

THE French president's attack on the "Anglo-Saxon" financial services model was criticised yesterday by Britain's top banking body, which said it raised serious questions about the impartiality of the new French nominee in charge of EU financial markets.

• Nicolas Sarkozy was triumphant over appointment of Michel Barnier. Picture: Getty

The broadside from the British Bankers Association against Nicolas Sarkozy's comments came as Chancellor Alistair Darling also warned Britain's EU partners not to stifle the City of London's financial services industry with excessive regulation.

In an escalation of the tensions about control of financial markets in the wake of former French agriculture minister Michel Barnier's nomination, the BBA said Sarkozy's outburst had damaged public confidence in the EU's new institutions.

In a statement on Sarkozy's comments, the BBA said: "His claim – that the appointment of Michel Barnier to the internal market portfolio would curb the 'free-wheeling Anglo-Saxon model' of finance – undermines the principle that commissioners serve all member states, not merely their home countries, and casts doubt on the reasons why the French advocated their candidate for the role."

BBA chief executive Angela Knight told the Worshipful Company of International Bankers' lunch in London yesterday: "Monsieur Sarkozy must surely recognise that he has undermined the EU with his statements and put a question mark over the impartiality of his nominated commissioner that will not be easily dispelled."

Knight, a former economics secretary in John Major's last Conservative government before she became a City grandee, added: "If anyone in the European project thinks for a minute that they are capable of subverting the years of effort it took us to make the UK the world's financial centre, they are sadly mistaken."

The City brought benefits, she said, "to all of the EU, not just the UK".

In his attack on the Anglo-Saxon financial markets model, Sarkozy had said: "I want the world to see the victory of the European model, which has nothing to do with the excesses of financial capitalism."

Chancellor Darling said in a newspaper article yesterday: "London, whether others like it or not, is New York's only rival as a truly global financial centre. No other centre in Europe offers the same range of services: banking, insurance, fund management, law and accountancy."

&#149 Finance ministers from the 27-country EU agreed yesterday to create three new pan-European watchdogs to police banks and financial services following the credit crisis.

"We've got a result," said French finance minister Christine Lagarde. "It's been a laborious process but I believe we've made real progress today on banking and finance."

The deal paves the way for three pan-European watchdogs to keep tabs on banks, insurers and trading exchanges in addition to a Frankfurt-based agency that will monitor bigger systemic risks to the EU economy.