McCreevy sketches out closer EU-U.S. market ties

By Huw Jones

BRUSSELS, March 8 (Reuters) - National champions have no role in a deeper transatlantic market for "frisky" capital where watchdogs should steer clear as much as possible, the European Union's top financial regulator said.

Charlie McCreevy was outlining his "principles" for a deeper EU-U.S. financial market as EU leaders were set to discuss German Chancellor Angela Merkel's idea for a new transatlantic economic partnership with closer regulatory ties at its core.

The merger of the New York Stock Exchange (NYX.N) and European bourse Euronext ENXT.PA was just a start, he said.

"At some point we will see moves towards a common pool of liquidity," McCreevy, European internal market commissioner, said in a speech in New York on Wednesday evening.

Calls for the bolstering of national champions in the face of a global capital market were "wishy-washy nonsense", he said in the speech, a copy of which was made available in Brussels.

"There is one place and one place only for the notion of economic security and national champions. Down the garbage chute," McCreevy said.

A deeper transatlantic market should be based on a multilateral approach, avoiding rule duplication and based on global standards, he said.

"Regulators should attempt to stay out of the line of play as much as possible, to observe closely, to step in when needed, but only to do so when absolutely necessary," McCreevy said.

Trade exchanges total 1 billion euros ($1.3 billion) a day, and greater economic integration and lower market access barriers could boost per capita GDP in the EU by 2 to 3.5 percent and in the United States by 1 to 3 percent, Merkel says.

NEW MOMENTUM

The EU and the United States already account for 80 percent of the world's cross-border market in financial services and the United States has become more accommodating in recent months on exchange listings, auditors, accounting and reinsurance issues.

EU President Germany wants a new Transatlantic Economic Partnership, partly focusing on improving convergence of EU and U.S. financial rules to make cross-border business easier.

EU leaders were due to endorse that during talks in Brussels on Thursday and Friday ahead of a U.S.-EU summit in April. McCreevy and the U.S. Securities and Exchange Commission announced separately on Thursday there would be an EU-U.S. industry summit in Dublin on March 26-27 on widening a "friction-free" transatlantic financial services market.

"Now, subtly, the debate is beginning to change. We see in the G7 10 days ago fresh requests to work towards a securities free-trade area. Green shoots from the SEC as well. That's new," McCreevy said.