More or less Europe?

Europe’s system for regulating its financial services was called to account during the financial crisis. In this extract from a recent speech, Lord Turner, chief executive of the FSA, argues that proposals for a new system may be a compromise, but one that could work without either setting back developments in creating a single market or removing the national sovereignty of local supervisors

We have been through a major financial crisis. There were many different causes of that crisis and many aspects of the reform programme needed in response. But among the most important and most difficult are those related to the international nature of the financial system. The essential challenge is that we have a global financial system with global banks and investment banks, global capital flows and global capital markets, which move together global surges and setbacks of confidence; but that governments, regulations and supervisory approaches are national, and that when banks get into trouble it is national fiscal resources which are employed to rescue them or compensate depositors.