Tuesday, 31 May 2011

Welcome to the EU Paul Tucker

Paul Tucker is Deputy Governor of the Bank of England and my old boss when I worked at the BoE. 'Bank Regulators warn over harmonisation of EU rules' is the page 1 headline on today's DT Business. Paul, Hector Sants and Andrew Bailey also ex BoE will run the new Prudential Regulatory Authority , PRA, a subsidiary of the new BoE. They have just discovered that under the 'maximum harmonisation' a Brussels initiative there will be no leeway for them as regulators to go above or below the European standard and as Mr Sants put it, " all we would be doing is policing European fixed standards."

Well that is the EU way. It ensures they keep control, take the credit and the national authorities act as a cloak for the EU rules. Its a bit surprising to read Paul saying,'Having made the decision to leave regulation at national level it doesn't make sense not to leave any tools with the national regulator'. Grow up Paul, that has been the EU way since  we entered in 1972! All real power is held in Brussels. Sense has nothing to do with it!

It is depressingly naive because Paul Tucker is a bright lad, next governor of the bank some say, a rumour Paul  does not discourage! What adds real piquancy to this heartfelt cry is that this whole new financial structure was largely dreamed up by one Matthew Hancock, ex BoE and now Tory MP for West Suffolk when he was George Osborne's chief of staff. The same Matthew Hancock  was Paul's bag carrier for a while at the BoE! Obviously Matthew did not tip off his old boss about the real politik of EU bank regulation! It just shows you can't trust anyone in this life.

I expect Matthew to be appointed a member of the Treasury team at Dave's first reshuffle. Wee George will be missing Matthew's ideas at HMT particularly on who to make next governor of the BoE! Pip pip!

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