How Christine Lagarde planned to use EU rules to force business from London to Paris – 7 years before Brexit

Christine Lagarde, Managing Director of the International Monetary Fund, attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 26, 2018.

Kay Swinburne MEP: “My French colleagues were obviously on a mission from 2009 to try and actually get, before Brexit, as much back to Paris as they could.”
Swinburne helped counter Lagarde’s efforts to force business out of the City by drafting reports that supported the business being done in London.
Swinburne helped “set the scene” for Mifid II, EU financial legislation that has just come in and “could have been a lot worse.”
Current efforts to force euro-denominated clearing out of London and into the eurozone post-Brexit “run counter to the global thinking,” Swinburne said.

LONDON — International Monetary Fund chief Christine Lagarde wanted to use European legislation to force financial business from London to Paris when she was the French finance minister, according to a senior British MEP.

Tory MEP Kay Swinburne told Business Insider that she collaborated with Downing Street to block Lagarde’s efforts by drafting a report defending high-frequency trading, an area vulnerable to attack.

“My French colleagues were obviously on a mission from 2009 to try and actually get, before Brexit, as much back to Paris as they could,” Swinburne told BI. “Obviously it was our mission to stop that.”

The IMF, where Lagarde has been managing director since 2011, declined to comment on Lagarde’s behalf.

‘They were already preparing reports’

Swinburne, who first became an MEP in 2009, said she met Lagarde shortly after joining the European Parliament. Lagarde told her she planned to use an upcoming legislation review as a means to force business back to France.

“Christine Lagarde was finance minister of France at the time and any women on econ [the EU’s Economics Committee] — there weren’t that many of us — she decided to take us under her wing and take us out for lunches and dinners to introduce us to the world of politics and financial services,” Swinburne said.

“She took me for lunch on my very first month there and told me the plan that they had with the Mifid review that was coming up in 2010. They were already preparing reports to set the scene for taking back trading from London and putting it back in the national exchanges.”

Mifid — the “Markets In Financial Instruments Directive” — came into force across the EU in 2008 and standardized the regulation around investment services across the bloc.

An unintended consequence of the regulation is that it provided a boost to London’s financial economy, as secondary share trading businesses set up in the capital to service clients across the EU, rather than being based locally or shares trading on national exchanges.

Lagarde, who was French finance minister from 2007 to 2011, planned to draft reports ahead of the official review of the legislation because “whoever takes the initiative usually gets the leading edge and the commission then follows,” Swinburne said.

‘It’s all to counter Christine Lagarde’s reports’

After discussing the situation with senior colleagues, Swinburne said she enlisted the help of then-Chancellor George Osborne to produce a paper illustrating the benefit of the current financial setup, in a bid to defend London from Lagarde’s efforts.

“We …read more

Source:: Business Insider


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