The European Union wants to take regulation of the infamous London Interbank Offered Rate (libor) away from the UK and give it to France, according to proposals leaked to the Financial Times on June 5. This is just the latest attack by the EU on the City of London.

libor was thoroughly discredited last year when major banks were caught lying about key information to manipulate the rate to their own ends. Many experts claimed that regulators and central banks knew about the deceit and turned a blind eye.

Trumpet columnists Brad Macdonald and Robert Morley wrote at the time:

Across the English Channel, European politicians and bankers are watching this saga and licking their chops.From the moment Britain joined the European Community in 1973, it has been the goal of European elites to beat their Anglo-Saxon “partners” into submission. For nearly four decades, Brussels has worked toward this end by bombarding Britain with an ever increasing number of laws, regulations and policies. One of the loftiest aspirations of European elites has been to directly or indirectly Europeanize British finance.For Europe, this scandal is a giant opportunity.

Since then, Britain has been trying to fix libor—this time with “fix” meaning repair, not fiddle. But now the EU is taking the opportunity to continue its encroachment on Britain’s financial sector.

The leaked proposals undermine Britain’s efforts. The EU is telling the world that it doesn’t trust the reformed libor and wants to regulate it itself.

The draft regulation would have the Paris-based European Securities and Markets Authority regulate libor. The EU could have proposed that the UK-based European Banking Authority regulate it, if it wanted to bring oversight within EU structures. Instead it went for the most provocative option.

“Could they have done more to annoy London?” wrote the Financial Times’Brussels Blog. “Probably not, at least in terms of the governance.”

“While London will see the measure as a vote of no-confidence in its measures to strengthen oversight of libor, Brussels has long sought to bolster the role of pan-EU financial regulators over banking, insurance and markets, with mixed success,” it wrote in a separate article.

Britain will fight it, and has a good chance of being at least partially successful.

No matter how immoral Britain’s bankers have behaved in the past, the fact remains that Britain is unhealthily reliant on its banking sector. More than one tenth of the government’s income comes from taxes on the financial sector. It is just about the only industry in Britain that sells more to the rest of the world than it imports. If the EU undermines that sector, it weakens Britain’s whole economy, and the nation will suffer.

If Britain succeeds in watering down this particular piece of regulation, the attacks will keep coming; Britain’s bankers will keep giving the EU ammunition in the form of their immoral behavior.

For more information on how the EU is a threat to Britain’s banking, see our article “The Death of Anglo-American Banking.”