Regulation across the EU to be resisted by UK

A European Commission proposal for a two-tiered financial supervision regime across Europe, including the creation of a European Systemic Risk Council will be published next week, the FT reports.

A "European system of financial supervisors" will also be set up to regulate banks and financial institutions.

Three existing pan-EU coordinating committees will be converted into European supervisory authorities for the banking, insurance and securities sectors by 2010.

These regulators will develop Europe-wide rules and will settle disputes between national regulators, who would handle day-to-day matters.

They could also supervise "certain entities with pan-European reach [such as] credit rating agencies and EU central counterparty clearing houses", the draft says.

The FT said the proposals would face fierce resistance from the UK authorities.