In recent years control of the City of London has effectively been ceded to the EU. Most financial and banking matters are now subject to EU regulation. Given the fact that London is a great global market this has its dangers. Many of us would prefer that the UK retained the power to make its own decisions about financial matters, and was able to set its own appropriate standards for the conduct of business as it used to do.
We were told when they set up the Euro that London would be marginalised and would lose out to the French and German centres. Instead, London boomed, as it offered a fast, efficient and economic way of transacting Euro business, just as it offered good services for dollar and sterling business as well. Now we are threatened that if London and the UK do not accept all this EU regulation, London will be banned as a location for Euro business. International trade rules and self interest by operators on the continent suggest this threat, like the ones before it, does not ring true.
The Euro area says it now needs much strongher and more centralised control over banks. So be it. If you are in a system with a single currency and central bank, there is a case for that. It is a matter which the Euro countries should decide. There is no need for us to give them advice or seek to influence what should be their decision.
For us the decision is also simple. We do not wish to be part of the Euro. We do not share a central bank. We do not need to join their banking union. What the UK government needs to do is to seek powers back over our system as the price for letting them complete their more centralised arrangements. There is no reason why London should have to accept rules they need for their single currency area. If they accept that there is no reason why the UK government should withold consent to their progress towards a banking union. This is an opportunity for both sides to have a new and more sensible relationship on this set of issues.