The United Kingdom's Alistair Darling will push fellow European Union finance ministers to scale back proposed banking rules that could force their governments to use taxpayer funds to prop up failing institutions in an emergency.

Darling, Britain's chancellor of the exchequer, was to argue at a meeting of EU finance ministers in Brussels today that the proposal to create a single regulator for European banks would hit the United Kingdom harder due to London's status as a financial center, an EU official said. The United Kingdom also is concerned that the agency could deal directly with financial companies if national supervisors refused to act.

Darling's push comes amid U.K. concern that the appointment last week of Michel Barnier — an ally of French President Nicolas Sarkozy — to be EU commissioner for internal markets will mean a tougher regulatory regime for London during his five-year term.

"The million-dollar question is whether, if these powers are eventually conferred onto the European authorities, the British are prepared to go to the European Court of Justice," the EU's highest court, to challenge the proposals' legality, Simon Gleeson, a partner in Clifford Chance LLP, said.

The European Commission in September proposed a system of European regulators, including separate supervisory authorities for the banking, securities and insurance industries, as well as a European Systemic Risk Board to monitor macroeconomic risks. It has proposed rules to regulate the financial services industry more closely, in light of the most severe banking crisis since the Great Depression.

European finance ministers are discussing the rules proposals at meetings in Brussels. The biggest obstacles to an agreement are "the exact binding powers of the European supervisors and with which voting rights that will be decided upon," Dutch Finance Minister Wouter Bos said Tuesday.

"Small countries benefit most from a well-functioning European supervisor," Bos told reporters in Brussels. "Big countries don't like to be corrected by a European authority."

Swedish Finance Minister Anders Borg, whose government holds the rotating EU presidency, said a "general approach on supervision" should be reached by today. "We had the worst financial crisis that we experienced in our lifetime," Borg told reporters, "and it is now time to come to an agreement and reach the decisions necessary."

France's Barnier, as the new internal markets commissioner, is to be responsible for proposing EU rules covering banks and other financial services companies throughout the Union. "It's the first time in 50 years that France has had this role," Sarkozy said in an interview with Le Monde published Nov. 28. "The English are the big losers in this business."

The proposed EU regulations may end the United Kingdom's role as a self-regulating financial center similar to Hong Kong, according to Thomas Huertas, the banking director at Britain's Financial Services Authority. "The U.K., and London in particular, has had the opportunity to be the Hong Kong to Europe," Huertas said at a debate Monday night on the future of the City of London, the U.K. capital's financial district.

"I am not sure that the rest of Europe wishes to allow that situation to persist," he said.

Barnier's appointment "proves that Europe has taken the consequences of the crisis" into account, Sarkozy said Tuesday.

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