Key to making the new framework operate well will be how the proposed new pan-European supervisory authorities co-ordinate the rules whilst the independence of the local supervisors is maintained, the British Bankers' Association said.
The BBA said a single rulebook could help those banks operating across EU borders but that while there is a role for someone to clarify the interpretation of rules, day-to-day supervision must remain with national regulators.
Mrs Knight said: "Today's package of reforms from the European Commission that looks at banking supervision needs to focus on ensuring that there are high quality, well functioning, colleges of supervisors for the cross-border banks, both for 'business as usual' and for stressed situations.
The creation of the new framework and a single rulebook will also require care if we are to achieve an outcome that does not result in a tick box culture of supervision.
We believe the Financial Services Authority and the Bank of England should now start preparing the ground for the new authorities to ensure the UK financial services sector is properly represented on these new European bodies."
