UK opposes Draghi role at watchdog Britain is pushing for Mario Draghi to be stripped of his automatic right to head Europe's top financial risk watchdog as it seeks to curtail the influence the European Central Bank will have following the creation of a eurozone banking union. The UK Treasury said in a submission to the European Commission that the European Systemic Risk Board should no longer automatically be chaired by the serving president of the ECB, given the sweeping changes happening in euro area financial regulation. The creation of a powerful new eurozone bank regulator in Frankfurt is raising questions about Europe's system of financial regulation as thinly resourced EU bodies, including the ESRB and the London-based European Banking Authority, attempt to navigate national rivalries. Britain is worried that its ability to influence EU regulation will be diminished as the 18 euro member states fuse together in a banking union with the ECB at its heart. Some members of the European Parliament's economic committee are also pushing for a change in the ESRB's governance arrangements to give it greater independence from the ECB, as are government institutions including Sweden's central bank and the Dutch finance ministry. In its submission, the UK said the transfer of supervision of eurozone banks to the ECB had "major implications for the governance and resourcing of the ESRB." The ECB would become the most important supervisory body in the EU, the submission said, meaning arguments for it to automatically chair the ESRB are "no longer valid." The UK added that the chairman of the ESRB should still be a central banker. The submission did not address the role of the deputy chair of the body, which goes to the Bank of England governor. Sven Giegold, the rapporteur on the European Parliament's forthcoming report on EU regulation, said there was a "clear conflict of interest" in the ECB president's role on the ESRB given the need for the committee to warn about the impact of monetary policy on financial stability. If you think about price bubbles and excessive credit growth, this is very often bred by lax monetary policy. I think it is important that the ESRB discusses these matters," he said. The ECB declined to comment. Already there are questions over the performance of the ESRB, which is meant to scan the horizon for looming risks to financial stability. The ESRB was last year ignored by the European Commission on a key recommendation over the rules governing money market mutual funds. John Roche of the consultancy Mazars, the co-author of a recent report for the European Parliament on the ESRB along with Samuel McPhilemy of the University of Warwick, said there was a risk of the ESRB becoming "increasingly irrelevant" given the powers being taken on by the ECB's new single supervisory mechanism. Yet Britain and other non-euro countries are placing significant weight on the ability of pan-European bodies, including the EBA and ESRB, to ensure the single market does not become dominated by the interests of euro members. The network of EU regulatory bodies was conceived in the landmark 2009 report of Jacques De Larosière. Mr de Larosière told the FT that the EBA's job in particular was likely to become increasingly important in the coming years because a supranational institution was needed to act as a credible body mediating between what could be two blocs - the 18 banking union members and the non-members, especially the UK. "We don't want trains diverging in all directions or a big "Balkanisation,"" he said. While he praised the work by the EBA since its inception, he was more critical when it came to the ESRB. "My view of the ESRB was very different from what is happening," he said. It seems rather procedural, with big meetings with a lot of people. He said it may need to be turned into a "leaner" organisation that was more detached from the ECB. "I would see something with fewer people around the table and a strong managing director, a leader who can talk to policy makers in a discreet way who would have the authority and confidence of its interlocutors," he said. David Green, former head of international policy at the UK's financial regulator, said there would be "a lot of changes in the dynamics" because of the creation of Banking Union, but that did not mean going back to the drawing board on the system set in train by the de Larosière report. Radical reforms are not really necessary. You want to put all your effort into simplifying the rules . . . [and] get proper processes in place to make sure the directives make sense," he said.