Protecting principles

Kitty Ussher, economic secretary to the Treasury, has spoken out in defence of the UK’s principles-based regulatory system, which became the subject of a whispering campaign across Europe for those that felt the UK had been let down by the more radical approach over Northern Rock. In a speech to the think-tank Centre for European Reform, she explained why the UK will continue with its approach, why it should be adopted more widely within Europe, and why the UK will not support a pan-European regulator.

The original estimates of the Ceccini report in 1988 were that fully integrated financial markets in eight member states would increase the value added of their financial services by 0.7% of GDP. Fourteen years later in 2002, London Economics concluded that fully integrated markets would lower the cost of capital by 0.5% and increase the GDP of the EU15 by 1.1% over time.