He was speaking at the City of London Corporation's Annual Reception for the City Office in Brussels.
The EU has agreed major changes to the structure of regulatory and supervisory cooperation in Europe to introduce greater integration and coordination between regulators. Lord Turner said that the success of these proposals will depend upon:
The ability of the proposed European Systemic Risk Board to develop good quality risk analysis and the "willingness of politicians to take its warning seriously and to countenance potentially unpopular responses";
Achieving a commonly agreed and enforced rule book. This needs a balance between political oversight and delegation to technical experts. It will require "technicians devoted to good regulation and supervision .... independent of apparent national interests (such as influencing the location of activities)"; and
A robust process of peer review between different regulators that would include resourcing and supervisory processes.
Lord Turner also warned about the risks that remain for host countries from cross-border banking business. The structures for cross-border business need to recognise the national interests of the host country. Host states should have the right to receive prudential information about entire groups and should be given powers to restrict the activities of branches where prudential weaknesses are not being adequately addressed by the firm or its home supervisor.