The most powerful man in European finance, Michel Barnier, Europe’s incoming internal market commissioner, will rack up an extensive frequent flyer account over the coming five years. He plans to be in a different country each week. This may seem a tasty perk but as his three-hour grilling by European lawmakers showed, he has his work cut out. On the surface, Mr Barnier’s performance was a lesson in politics from a seasoned bureaucrat. He spouted ethics, played down the City of London’s fears of draconian regulation, and distanced himself from the sometimes inflammatory French president Nicolas Sarkozy. And all while avoiding concrete promises.

One comment, though, may hold a hidden meaning. His stance that “no financial product will escape relevant regulation” may have led to groans at the thought of additional regulation. But the word “relevant” could indicate that some regulation may actually decrease.

Chief among the contenders for any easing are alternative asset managers such as private equity firms and hedge funds. The proposed tightening of disclosure and capital requirements has been derided by most as overburdensome. Despite being born with the aim of reining in hedge fund traders known for short-selling, the rules have netted an entire industry. The implications are vast. Unintended consequences may include a restriction on the access to capital for small- and medium-sized enterprises. And the last thing the savvy Mr Barnier wants is to be criticised for harming middle Europe.

Ahead of next week’s hearings, which include discussions on the access to capital, Mr Barnier has been given a preliminary nod of approval. But the tests that will put pressure on his popularity are yet to come. The derivatives market will be one of the first targets in his sights. But no matter how “relevant” any new derivative rules may be, it is guaranteed that pleasing everyone will be impossible.

Post a comment below or e-mail the Lex team confidentially

Get alerts on Lex when a new story is published

Copyright The Financial Times Limited 2018. All rights reserved.

Follow the topics in this article