Speaking at The Lawyer’s Funds Summit, Saunders said "At last count I made it 35 separate legislative measures [across Europe]. Much of it is good, for example the forthcoming Packaged Retail Investment Products initiative and many parts of the new Markets in Financial Instruments Directive (Mifid).
"But others, such as the proposed Financial Transactions Tax (FTT) and some of the detailed provisions in Mifid will have unintended consequences and will not achieve their objectives."
Saunders said hedge funds had been the misplaced recipients of much of the regulators’ wrath, which had underplayed the role of the banks in the global financial crisis.
The pinnacle of ill-considered proposed legislation in Saunders’ point of view is the FTT. "Although the stated intention behind the FTT is to increase taxation of financial institutions it will miss its targets. It will be customers, not banks, who will bear the cost. And it risks a flight of trading out of the EU,” he said.
Another target of his scepticism was the powers given to the European Securities and Markets Authority to ban short selling, as short sellers do not "create volatility, though they may profit from it".
He concluded the need for reform should not be ignored, but said it should be appropriate and proportionate and not, as it currently stands, damaging to the EU economy as a whole and the UK in particular.
