Proposal to scrap UK veto so FSA can be over-ruled

European Parliament lawmakers proposed giving more direct powers to three new EU-wide supervisors to regulate banks, insurers and markets, Reuters reports.

They want them to be able to overrule national watchdogs such as Britain's Financial Services Authority. They also want to fast-track the setting up of an emergency fund paid for by financial firms as well as a pan-European deposit protection scheme for savers.

"We don't agree with the idea of having a super European uber regulator," Peter Levene, the chairman of insurer Lloyd's, told Reuters. "In every business there is an element of risk. If you want to make anything like that risk free you will come to a complete halt."

German view changes

But German chancellor Angela Merkel is calling for fast regulation of the financial industry after the European Union scrambled to assemble a $1trillion emergency package for its flagging countries.

Last December, Britain agreed to let the EU establish new authorities to police financial services but only on the condition a country could veto their decisions if they would cost public money. The UE parliament wants tos crap that veto.

European lawmakers postponed their vote because of a dispute over how private equity should be regulated.