BORIS: ORGY OF CITY BASHING MUST STOP

LONDON Mayor Boris Johnson yesterday leapt to defend the financial services industry, arguing that politicians and the City needed to be “far more vociferous” in opposing regulations dictated by the European Union.
 

Speaking at the Confederation of British Industry’s (CBI) annual summer lunch, Johnson said: “It is crazy that we are so passively and supinely accepting EU directives on hedge funds, capital adequacy and other issues. We should be far more robust in defending the City of London. We are crazy to go around attacking our financial services industry and should hope for its speedy recovery.” He warned that there had been “too much of an orgy of banker bashing”.

This will set him up for a clash with chancellor Alistair Darling, who will tonight in his Mansion House speech warn bankers to expect a crackdown and to stop chasing short-term profits. Darling’s speech comes ahead of next week’s Treasury white paper on financial regulation.

“Anyone who thinks we can carry on as if nothing has happened should think again,” he will say. He will call for better board-level controls, more transparency, stronger national and international regulation, better means of dealing with failures, and a greater focus on system-wide risks. And he will slam Tory proposals for breaking-up very large financial institutions.
 

But he will echo Johnson’s criticism of the EU power grab. The growing opposition to Brussels will also be bolstered by a House of Lords report today, which warns plans for two pan-European watchdogs have been rushed and Britain will not have enough say in future rules.
 

The Lords Committee, led by Lord Woolmer, will say the EC is ignoring its own principles on regulation, which call for far-reaching and lengthy consultation with interested parties. The committee is “concerned that the UK government has not set out their own thinking to influence the debate on these reforms”. Lord Woolmer told City A.M. the proposals could be particularly damaging to the UK’s alternative investment industry, the biggest in Europe. “Financial services is a key strategic industry for the UK. Many EU states don’t share that perspective,” he said. “The proposals are a bit of a dog’s breakfast. They’ve got it wrong on alternative investment. If they had had full face-to-face consultations they would have come up with something better.”
 

Johnson yesterday also urged bankers to “rejoin the human race”, joking that any who had accepted a bonus from taxpayer funds could assuage their guilt by donating the cash to the Mayor’s Fund for London.