U.K.’s Man in Brussels Says City Gets No ABS Favoritism

The man David Cameron sent to Brussels to be the U.K.’s representative in the European Commission made his first major policy announcement on Wednesday, telling the City of London not to expect preferential treatment.

Jonathan Hill said that while he hoped the U.K.’s financial center would support his proposal to loosen banks’ capital rules to revive Europe’s asset-backed debt market, the move was intended to benefit all of the European Union’s 28 countries, not just Britain.

“I hope that people in the City of London will welcome it because I think the City of London, generally speaking, is a place that is in favor of single-market projects, of open markets,” Hill said in an interview with Bloomberg TV in Brussels. “I’m more concerned about what we can deliver for all 28 members states than I am for what it might deliver for any one member state.”

Hill, British Prime Minister Cameron’s nominee to the commission, has been the EU’s financial-services chief since November. His term lasts for a five-year period that could include a U.K. referendum on Britain leaving the bloc.

He took over from Michel Barnier, a Frenchman who frequently had to rebuff claims that his policies were hurting London’s financial district and resulting in a shift of business to centers in the euro area.

Hill’s capital markets union plan, which he opened to public comment on Wednesday, may also include measures to boost standardization in the asset-backed securities market by creating an “EU securitization structure.”

‘Bigger Market’

“My view of the City of London would be the same as my view about any financial center, which is that well-run, efficient, competitive businesses, providing services that customers want -- whether that’s businesses or retail investors -- should do well from a bigger market,” Hill told reporters in Brussels.

Hill, who helped found a lobbying company in London with financial institutions among its clients, faced down scrutiny from European lawmakers over his links with the City before he was confirmed in the role in October.

Cameron repeated on Wednesday his pledge to hold a referendum on renegotiated EU membership terms by the end of 2017 if re-elected in May’s general election. The U.K. Independence Party, which campaigns for Britain to leave the EU, will win 18 percent of the vote according to an TNS opinion poll of 1,193 adults published on Wednesday, behind Labour on 35 percent and the Conservatives on 28 percent.

Wednesday’s initiative is “extremely important for the EU’s attempts to kick-start growth in Europe,” Sally Scutt, deputy chief executive of the British Bankers’ Association, said in a statement. “But as the capital markets union is being developed, policy makers need to recognize that some of their other plans,” including a financial transaction tax, “could be counterproductive.”

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