MercoPress. South Atlantic News Agency

London alert as EU readies to approve supra-national financial regulatory agencies

Barnier promises new plans are “intelligent and non discriminatory”

Europe's regulation chief has told London based companies to 'remain calm' over plans to give Brussels new powers to control their business.

On Tuesday EU finance ministers are set to approve plans that would give European agencies new powers to over-rule the decisions of national regulators such as the UK’s FSA and control the banks, insurers and other financial institutions.

The new agencies would have sweeping powers to intervene at their own discretion and will mean greater scrutiny of hedge funds, foreign exchange and derivatives trading.

But European Union internal market commissioner Michel Barnier told the Financial Times that new plans would be 'intelligent and not discriminatory' ahead of Tuesday's vote to approve plans for a new Europe-wide regulatory framework.

And despite recent protest from bankers, Barnier said the new tighter rules would not put Europe at a disadvantage saying US regulators have put in place similar new rules.

But despite Barnier's comments London market players remain skeptical, fearing the new rules could see a shift in power from London and a surge in the importance of rival financial centers such as Paris and Frankfurt. Others have expressed concern the new rules will become more invasive and more detailed over the years to come.