By John O'Donnell and Huw Jones BRUSSELS/LONDON, May 10 (Reuters) - European lawmakers demanded more clout for pan-EU super watchdogs, amid a crescendo of calls from political leaders for new powers to police speculators they blame for exacerbating the economic crisis. Parliament's move to beef up what a senior figure in London's financial centre derided as "ueber-watchdogs" adds to momentum to create powerful policing authorities that would monitor markets to prevent a repeat of current turmoil. Their plans, which need the backing of European countries to become law, put them, however, on a collision course with Britain, which fears loss of influence. "We don't agree with the idea of having a super European ueber regulator," Peter Levene, the chairman of insurer Lloyd's, told Reuters. "In every business there is an element of risk. If you want to make anything like that risk free you will come to a complete halt." But momentum is building in parliament's favour with German chancellor Angela Merkel calling for fast regulation of the financial industry after the European Union scrambled to assemble a $1 trillion emergency package for its flagging countries. On Monday, parliamentarians proposed giving more direct powers to three new supervisors to keep tabs on banks, insurers and markets. They want them to be able to overrule national watchdogs like Britain's Financial Services Authority in telling international too-big-to-fail banks in London such as HSBC what to do. Lawmakers also want to fast track the setting up of an emergency fund paid for by banks as well as a pan-European deposit protection scheme for savers. RULES ON DERIVATIVES Last December, Britain agreed to let the EU establish new authorities to police financial services but only on the condition a country could veto their decisions if they would cost public money. Lawmakers in Brussels now want to do away with this blanket veto by insisting that a country that challenges a ruling must first prove it would cost taxpayer money and then convince a majority of other European countries that this would happen. As they voted on the proposals in Brussels, the European Union's financial services chief Michel Barnier was in New York, promising rules within weeks on trading derivatives, an uncontrolled market many see as a casino for speculators. Barnier will meet U.S. Treasury Secretary Timothy Geithner and attempt to smooth over differences with Washington over how best to regulate hedge funds. European lawmakers postponed their vote on this controversial draft law on Monday because of a dispute over how private equity should be regulated. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ FACTBOX on hedge funds, supervision measures Q&A-How fear of speculators drives EU leaders ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Many working in London's financial centre, Europe's largest, are sceptical of the drive by Brussels to clamp down on an industry that is crucial for the British economy. Under the proposals from European lawmakers, European watchdogs would get unprecedented powers to intervene by, for example, suspending trading in a financial product it sees as risky. Keywords: EU FINANCIAL/REGULATION (Editing by Tony Austin; Contact John O'Donnell on +32 2 287 6817 or +32 473 92 48 90; firstname.lastname@example.org) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.
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