And don't forget, if your regulations are too difficult to conform to, these banks and hedge funds will simply move operations to somewhere less stringent.

Well, we could remove their existing optout from the Working Time Directive. As to the "but they'll just leave for the Third World!" claim below:

1) it's a networking-based industry. Everyone would have to move at once, or at least a very large chunk.

2) They would have to move to somewhere in the same time zone (finance has outposts in NY, London and Singapore/HK that cover the day in 3 8-hour trading days). I suppose that's less relevant if you're working 20 hours a day.

3) They'd have to move to somewhere similarly cosmopolitan to London. No point in making all that money if you can't walk out the door and find somewhere to spend it in your few precious hours off. That rules out much of the African continent, although there are expat clusters in Angola and UAE.

Regulations seem to me a lot less magical than the free market. I live in a country with a lot of regulations when it comes to working time and it does not seem to harm. It is one of the strongest economies in the world. I guess the market can live with it.

There are strict limits for extra hours. As an employee working more than 48 hours per week is allowed only as an exception and working more than 60 hours per week is simply put illegal. Extra time has to be balanced with free time. We also have a minimum of 24 payed vacation days. Most people have more.

In continental EU legislation (AFAIK unlike USA), no contract can waive rights provided by legislation.

If a job contract includes provisions that explicitly give up some of basic job limits (say, no vacation, unpaid overtime, limits of shift/week length, etc) - then, barring very few exceptions (listed in the same legislation), those parts of agreement are null and void. It's the same as it's everywhere for minimal wage - even if you sign a contract that you'll work for $0.05/hour, then that provision anyway means $[minwage]/hour.