German Finance Minister Peer Steinbrueck has accused the UK of blocking tougher financial rules ahead of the G20 summit.“There clearly is a lobby in London that wants to defend its competitive advantage tooth and claw,” Mr Steinbrueck told Stern magazine.
Germany and France have led calls for more restrictions on banks, which have been resisted by the US and UK.
The G20 leaders will meet in Pittsburgh later this week.
London opposition
Mr Steinbrueck pointed out that the financial sector accounts for 15% of the UK’s gross domestic product (GDP) in contrast to just 6% in Germany.
“Politics at times is like a train engine, it’s slow to get up to speed”
Peer Steinbrueck, German finance minister
The UK has “particular difficulties” regulating hedge funds “to put it politely”, he told the weekly German news magazine.
There has been much debate about how to reform the financial services sector of the global economy after the banking crisis a year ago.
The UK and US have been resistant to calls for restrictions and to mandatory caps on banker bonuses, as proposed by France.
But Mr Steinbrueck was confident that there would be progress at the G20 meeting.
“Politics at times is like a train engine, it’s slow to get up to speed, but it can pull more and more people along,” he said.
“We will deeply change the rules of the game for financial markets.”
He said he didn’t want to have to go through the experiences of the past year again.
“Back then, the stick of dynamite nearly blew up in our faces,” Mr Steinbrueck said.
‘Obscure’
This week’s G20 summit in the US will also call for major reforms to promote a more balanced global economy.
A draft document seen by the BBC says huge imbalances in the global economy must be ironed out.
But Brazil was unenthusiastic about the draft statement.
“The way it is, this proposal is obscure and we do not agree with it,” Brazil’s Finance Minister Guido Mantega said.
He said the G20 should focus on monitoring the financial system, performing stress tests to determine whether banks need more capital.
Indian Prime Minister Manmohan Singh also said the G20 needs to deliver a strong message against protectionism in trade and international financial flows.