How to Destroy an Industry

In the interests of financial companies having the ability to work across the EU’s 25 members, a directive was dreamt up by the wise men of Brussels. Now it has reached implementation phase and all is not well in the financial sector.

Worries have intensified as the detailed implementation of the markets in financial instruments directive (Mifid), which seeks to create a pan-European market for investment products, reaches a decisive stage.

There are elements of the directive that could make the financial markets much worse off. For Example:

The European Banking Federation (FBE) has hit out at a draft plan to force banks to reveal to the market details of large equity positions they have taken on their books.

So now everyone will know how much Vodaphone or M&S stock you have in your hands when you want to sell. Can you imagine the extra bargaining power of buyers in such a position. A company with too much exposure to a softening financial product could find shifting it totally impossible. Another general worry was the addition of items after consultation.

International and European trade bodies, including the London Investment Banking Association, the International Capital Market Association and the Bond Market Association, have also raised concerns. They are worried about issues that "appear to have been introduced at a late stage without any formal assessment of their market impact".

Once again Meddling Bureaucrats 1, Common Sense 0.