Ever since the global meltdown of the financial industry the EU has been looking to regulate all financial markets in a much tougher manner. No more self-regulation for you, sir! EuroparlTV went to London to hear what those most affected - the bankers in

Reporter: Lessons learnt and soon forgotten

The City of London turns over almost   $1.7 billion in foreign exchange every day.

The Square Mile accounts for 22%   of the global market in foreign equities

and 93 million metal contracts   are traded every year.

After the crisis,   the EU wants to see more control

of all financial markets   through tougher regulations,

but many in the City fear   that will stifle profits.

Only 8,000 people   live in the City of London,

So there's concern at how   EU regulations will affect jobs.

Alternative investments - hedge funds,   that aid risk management,

and private equity, sources of capital   not quoted on the stock market -

or privately wealthy investors,   but here they matter.

There's been a lot of fire and smoke   about hedge funds and private equity

and about how they're   somehow perhaps detached

from what people euphemistically call   the real economy.

But hedge funds in this country   employ over 15,000 people.

They account for over £4 billion, I think,   in 2008 of tax revenues,

so it's an important part of our economy.

The task of drafting the EP's view   of alternative investments

fell to this man, French MEP   and former banker, Jean-Paul Gauzès,

who travelled to a doubtful   City of London to explain.

We're putting in place regulation   that isn't meant to be against Britain

or to paralyse the financial industry   in Europe.

On the contrary, we're trying   to create a real 'label'

to make European funds, or those   regulated the European way, attractive.

Mr Gauzès wants to see rigorous   reporting and disclosure requirements,

to oblige firms to hold larger reserves   of capital and to set borrowing limits.

City insiders say   costs would be disproportionate

for venture capitalists and small firms.

They fear EU lawmakers don't   understand financial markets.

Because the directive covers hedge   funds, private equity, real estate, etc,

some of their provisions   are relevant for a hedge fund

In fact, they would add cost and burden.

What you don't want   is the net effect of all this

being a reduction in the attractiveness   of the industry

Less finance is available   to European companies for growth

and pension fund returns   when they're creaking.

The Commission wants transparency   in derivatives trading.

It's easy to dismiss derivatives   as part of a casino for the rich

which help companies and countries   hide their finances as Greece did,

Over the past few years,   it's become much more common

to have a fixed rate mortgage   rather than a floating rate mortgage.

That involves a long-term   interest rate hedge.

Another example is that few farmers   currently sell wheat that they've grown

They've sold it in advance,   so that is a commodities future.

The Commission is considering restricting   some types of speculation.

Banks must have enough capital   not to need bail-outs

But there's concern that new regulations   in the EU and the USA

are driven partly by a desire   to appease an angry public.

I'm a cynic about politicians. I worry about   the eventual outcome - good regulation -

if politicians are to some extent   playing to the grandstand.

Europe's industrial production is back to   where it was 20 years ago - a 20% fall -

and the crisis has left   23 million EU citizens out of work.

Greece has grabbed the headlines with   its 110 billion euro rescue package,

but other Eurozone countries are having   problems with budget deficits and debt.

Only five countries, for the time being,   fulfil all Maastricht requirements.

The global meltdown   has left a generation in debt

while some bankers earn   huge salaries and bonuses.

Negotiations on various forms   of regulation

Legislators are set on   reigning in the financial markets