STOCK MARKET WATCH, Tuesday, December 13, 2011

[Ghost Dog]

21. London banks stunned by Britain's EU veto

(Reuters) - Britain's veto of European Union treaty changes drew an embarrassed silence from London's financial heartland, where bankers fear last week's hardline stance will lead to a further loss of influence for the City.

Prime Minister David Cameron said he had vetoed the changes to allow countries that share the euro to pursue closer fiscal union because his EU partners would not give Britain enough freedom over how it regulates the City of London. But people working in London's financial industry denied Cameron's actions had been inspired by them and said they could ultimately damage the capital's position as a financial centre.

"This leaves us considerably worse off than we were before," said one City insider. "There is a very strong body of opinion, not all over Europe, but in many financial regulators, that Anglo-Saxon financial services have caused the crisis and therefore anything bad for us is good for them," this person said...

... Banks feared other EU countries would now start drawing up regulation without paying much heed to the City of London -- home to Europe's largest financial sector -- with the risk that this would fragment the continent's single market.

The UK is host to more branches of foreign banks than any other country worldwide, a third of those from the euro area. Around half of European investment banking activity is conducted in the UK, according to the CityUK lobby group.

/... http://uk.reuters.com/article/2011/12/12/uk-banks-britain-eu-idUKTRE7BB1HZ20111212