Britain's Mandelson says EU failing to lead on banking reform

(LONDON) - British Business Secretary Peter Mandelson attacked the European Union on Sunday for failing to provide stronger international leadership on banking reform following the financial crisis.

"I think that both the European Council and the European Commission have to play a much stronger leadership role," Mandelson, regarded as Prime Minister Gordon Brown's de facto number two, told the Sunday Telegraph newspaper.

"Heads of government need to set the direction and pace and the commission needs to be a much more active implementing body than perhaps we've seen in recent months."

The former EU trade commissioner deplored a "failure in the EU to show stronger leadership" on global banking regulation, adding: "European heads of government need to show more of a strategic lead to the EU as a whole."

Mandelson also said there was a "surprising lack of internationalism displayed by the US administration" on banking reform, after President Barack Obama proposed a tough package for banks in the United States last month.

"Above all, governments need to speak in an internationally joined up way," he told the newspaper.

"This is an international banking system we are trying to regulate and if we have different moves made by various governments you are opening up the risk of regulatory arbitrage of competing banking jurisdictions, rather than encouraging competition within financial markets as a whole."