MiFID – Markets in Financial Instruments Directive.
The EU wishes to see a common financial services structure across Europe and it will be European system. The overwhelmingly more successful British system is to be run down as it is 'Free Market' and so not compatible with the EU Agenda.
MiFID is the first thin slice of the Euro-salami that is intended to transfer the world’s centre for financial services from London to Frankfurt.
EU-wide 'super regulator' poses threat to City of London
By Ambrose Evans-Pritchard
Last Updated: 12:32am BST 22/05/2008
A top cast of European statesmen has issued a blistering denunciation of financial markets and called for a creation of a pan-EU body to protect the citizens against the "social risk" posed by modern capitalism. "The financial world has accumulated a massive amount of fictitious capital, with very little improvement for humanity," said the group in an open letter to the European Commission and the EU presidency.
"The current financial crisis is no accident. It was not, as some top people in finance and politics now claim, impossible to predict. For lucid individuals the bell rang years ago. This crisis is a failure of poorly or unregulated markets, and shows us, once more, that the financial market is not capable of self-regulation," it said, calling for the a new "European Crisis Committee" to take the matter in hand.
"Free markets cannot ignore social morals. Decent capitalism needs effective public policy. But when everything is for sale, social cohesion melts and the system breaks down," it said.
The letter is signed by former premiers and finance ministers from Europe's socialist bloc, including ex-German Chancellor Helmut Schmidt, France's Lionel Jospin and Michel Rocard, and former Commission chief Jacques Delors. While the initiative comes from the Left, it is in tune with the views of French president Nicolas Sarkozy and German Chancellor Angela Merkel. Both have called for measures to clamp down on "speculation".
The fulminating text is the clearest evidence yet of the mounting drive for an EU-wide "super regulator", which would reduce Britain's Financial Services Authority to a regional branch - and pose a grave threat to the City of London.
"Financial markets have become increasingly opaque. The size of the lightly or not-at-all regulated "shadow banking sector" has constantly increased in the last twenty years. Inadequate incentive schemes, short-termism and blatant conflicts of interest have enhanced speculative trading.
One investment bank earned billions by speculating downwards on sub-prime securities while selling them to its clients, epitomising the loss of business ethics!" the letter said.
European critics of Anglo-Saxon "casino" capitalism have seized on the credit debacle as a chance to clip the wings of the City and to extend EU jurisdiction deeper into financial affairs - a jealously-guarded domain of EU member states. They know that Britain is unusually vulnerable to pressure after the Northern Rock affair, which exposed grievous shortcomings in the UK regulatory structure.