The chairman of the Financial Services Authority hit out at a raft of European directives aimed at regulating markets across Europe.

Speaking at the Lord Mayor's City Banquet, Sir Howard Davies criticised parts of the European Commission's Financial Services Action Plan.

The idea is to ensure financial markets are open to competition and Sir Howard welcomed earlier directives which followed a "minimum standards" policy.

But Sir Howard also warned that a new wave of directives, which follow a "maximum harmonisation" policy, were unworkable.

"This imposes a 'one-size fits all' approach on European markets, which simply does not reflect the reality of the differences from one member state to another."