UK FSA repeats call for hands-off EU regulator

LONDON, June 9 (Reuters) - Europe should create a single financial regulator that would supervise but not replace national watchdogs, the chairman of Britain's City regulator said on Tuesday.

Adair Turner told a conference that the Financial Services Authority did not support either a scenario with no pan-European regulation or one without national supervisors.

"We are not going to go in either direction ... We have to create mechanisms which, by a supervisor of supervisors, achieve the effect of what we need to achieve," he said.

His comments are a reiteration of the FSA's call for a single European regulator that is not involved in the direct supervision of financial companies -- which should remain a national responsibility -- but with an extensive coordinating role.

Turner was speaking as regulators gather in Tel Aviv for the annual meeting of the International Organisation of Securities Commissions (IOSCO), which runs until Thursday [ID:nL8366078].

"The failure of the Icelandic banks clearly illustrated to us that we cannot have a single market in European branch banking without a greater degree of coordination at European level," Turner said.

The FSA's future focus will be on putting in place right rather than light regulation, he added, rejecting the body's previous light-touch approach, which had made London one of the most attractive places in the world to do business.

"We are not primarily focused on saying 'How does everything we do change our competitiveness vis-a-vis some other sector and centre of the financial world?,'" Turner said, adding that the costs of getting financial regulation wrong had turned out to be too big for Britain's economy.

"We very clearly will have a focus in the future that says the priority, certainly of prudential regulation, is prudential regulation that achieves financial stability.

"Having said that, we have no desire whatsoever to impose regulations where they are unnecessary," he added. (Reporting by Olesya Dmitracova; Editing by Steve Orlofsky)