House of Lords EU Committee report on the post-crisis financial regulatory framework

July 14 2015


  • Lord Harrison

  • Lord Flight

  • Sir David Scholey (UBS Investment Bank)

  • David Reed (Kreab)


As you probably know, the European Union Committee of the House of Lords has a sub-committee on economics and financial affairs,  which was until recently chaired by Lord Harrison of Chester – a Labour peer and former member of the European Parliament for Cheshire West. The sub-committee produced an important (and well-received) report on EU financial regulation that was published a few months ago.

It is a formidable piece of work, focusing on the role of the ESAs and how their powers might be enhanced to avoid some of the pitfalls into which EU regulation has fallen in recent years – notably, with the AIFMD, CRD IV and the FTT. In some ways, what Lord Harrison and his mates have produced is a blueprint for Lord Hill to follow in the financial services field – going well beyond his plans for CMU.

This is an important report, and we are delighted that Lord Harrison has agreed to explain what his terms of reference were, and to walk us through the main conclusions and recommendations. We are also delighted that one of his sub-committee colleagues at the time, Lord Flight (known to most of us in the City as Howard), has agreed to back him up. There are few members of the House of Lords who have anything like the experience of the financial services sector that Howard has. In addition to his time as Shadow Chief Secretary to the Treasury, he is chairman of Aurora Investment Trust, a director of Metrobank, a Commissioner of the Guernsey Financial Services Commission – and so on and so forth. And, for those with long memories, he was, of course, half of Guinness Flight, now part of Investec.

But this is not just an opportunity to applaud a job well done. Will the report actually make a difference? And is it even heading in the right direction? To kick off the discussion, we are privileged to have one of the most distinguished figures in UK banking over the last quarter century. Sir David Scholey is currently a senior adviser at UBS Investment Bank – but the City knows him best as a former chairman of SG Warburg and as a director of the BofE. He is also a former chairman of Close Brothers, a Governor of the BBC and chairman of the trustees of the National Portrait Gallery. In other words, a man of many parts. Joining him on the panel will be David Reed, who is a partner and head of financial services for Kreab Gavin Anderson in Brussels. Before joining Kreab in 2008, he spent three years at the Commission (in DG Markt), and, before that, three years at the FSA in London. There are few Brits in Brussels with his depth of knowledge of how the regulatory machine works.

This is obviously an eminent panel – but we shouldn’t be too polite. Most of us live or die by financial regulation, and what is coming out of Brussels is absolutely crucial to the health of the City.