Britain and other members of the European Union (EU) should be permitted to keep overall control of their financial industries, a senior official believes.
Lord Turner, chairman of the Financial Services Authority (FSA), believes that moving regulation of individual banking sectors under the umbrella of the EU would be an error.
During a speech delivered today (27 April) at the Central Bank of Ireland conference in Dublin, the FSA official said such action would serve only to increase instability across the single market.
"It is essential that the forthcoming directive and regulation leaves appropriate discretion at national level. For countries within the eurozone, unable to vary their own interest rate, the need is still greater," he noted.
Lord Turner - who was appointed FSA chairman in September 2008 - explained that issues such as credit and property pricing booms may become more common if these EU proposals went through, which would then increase volatility on the continent.
By Claire Archer