Britain risks being "marginalised" by the eurozone's move towards banking union, a parliamentary committee has warned.
As European Union finance ministers met in Brussels to discuss plans for a single supervisory mechanism for banks in the single currency area, the House of Lords EU Committee wrote to the Treasury to raise concerns about the scheme.
Banking union could damage the City of London by leaving the UK on the margins of financial decision-making, and hurt the British economy by threatening the integrity of the single market, the com-mittee warned.
The meeting was intended to set the scene for a European Council summit in Brussels on December 13-14, at which EU leaders, including Prime Minister David Cameron, will discuss the plans for banking union.
Lord Harrison, chairman of the cross-party Lords EU Sub-Committee on Economic and Financial Affairs, said Mr Cameron must be prepared to defend the City's interests at next week's gathering.
"The Government must do all they can to ensure the UK's pre-eminence is retained, not assume it will always remain."
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