It may not have come to anything much, but this week's posturing on financial services regulation by France and Germany was a little unnerving from the perspective of the City.
Although the summit failed to give birth to the new global regulator French and German statesmen (and women) were advocating earlier in the week, their enthusiasm for regulating global finance and squishing 'Anglo-Saxon capitalism' probably shouldn't go unnoticed.
The US government was notably cooler on calls for a global financial regulator, claiming that: "Markets are global, but regulation is still the sovereign responsibility of governments."
This puts the City in a interesting position. Following the last month's Turner Review, the UK now looks likely to submit to European regulation in the form of a 'College of Supervisors' which both sets standards and ensures standards are imposed. As such, it would oversee the FSA.
Whether the College of Supervisors proves detrimental to the City's interest will depend upon its construction.
If voting is on a majority basis and membership is allocated on the basis of member states, Harvey Knight, a regulatory consultant at Withers LLP and the former lead authorization and approvals lawyer at the FSA, says there's a danger of vital interests of the City being voted against: "London is an outlier. Our financial markets tend to be more sophisticated, complex and global in their nature than other member states."
At the same time, the City's voice in the strengthened IMF and Financial Stability Board may also be in danger of European dilution. According to the Telegraph (admittedly not known for its pro-European stance), greater representation for China and developing countries will result in the UK being required to side with Europe on key issues.
With the US set to maintain its regulatory independence, the City's inclusion in a vehemently anti-Anglo Saxon European regulatory block could yet prove damaging and cost jobs.
In an earlier article we argued that this would not be an issue and the College of Supervisors could even be based in the City. In fact, this seems unlikely: Knight points out that two of the three current regulators, the CESR and Ceiops, are based in Paris and Frankfurt respectively.