Britain does not want a pan-European regulator for financial services, British minister Kitty Ussher will tell the Centre for European Reform today.
The firm stance comes as the Treasury and Financial Services Authority launch a discussion paper on a review of the EU Lamfalussy Arrangements for financial services supervision - a framework designed to make EU lawmaking more efficient.
"I hope that we can make the Lamfalussy arrangements work even more effectively in future - both for Britain and for the rest of Europe," Ms Ussher will say, according to Treasury officials.
"To do that, they need evolution, not revolution; we must avoid drifting towards a pan-European regulator that would be rigid and stifling."
A senior EU official last month criticised member states for not taking tough action against insider dealing and said there could be more convergence of regulation. The FSA, for example, has not brought a criminal case for insider dealing since it became responsible for enforcing the law in 2001.
"We can see the benefits of action in the European stage, but that doesn't mean we shouldn't work to make that action as effective as possible and ensure that the interests of the British financial services sector are at the heart of EU decision-making," Ms Ussher will say.
EU Internal Market Commissioner Charlie McCreevy has repeatedly ruled out creating a pan-EU regulator akin to the US Securities and Exchange Commission, saying it would have no hope of getting political backing.