European Commission, Technical Assistance Information ExchangeEuropean Commission, Technical Assistance Information ExchangeUnit (TAIEX), DG Enlargement Unit (TAIEX), DG Enlargement

in co-operation within co-operation with The Bulgarian Chamber of Commerce and Industry (co-organiser) The Bulgarian Chamber of Commerce and Industry (co-organiser)

Seminar on Financial ServicesSeminar on Financial ServicesSofia, 16 September 2005Sofia, 16 September 2005

Future developments for financial Future developments for financial services. The Green Paper on Financial services. The Green Paper on Financial

Services Policy 2005-2010Services Policy 2005-2010

Argyro LeoutseaArgyro Leoutsea

Advocate, GreeceAdvocate, Greece

Objective of the financial services policy for Objective of the financial services policy for the future as set in the Green Paper:the future as set in the Green Paper:

1.1. Achieving a fully integrated, open, competitive and economically Achieving a fully integrated, open, competitive and economically efficient European financial marketefficient European financial market

2.2. Eliminating any remaining economically significant barriersEliminating any remaining economically significant barriers

3.3. Promoting the creation of an EU market where financial services Promoting the creation of an EU market where financial services and capital circulate freely at the lowest possible cost with and capital circulate freely at the lowest possible cost with adequate and effective levels of prudential control, financial adequate and effective levels of prudential control, financial stability and a high level of consumer protection.stability and a high level of consumer protection.

4.4. Implementing, enforcing and continuously evaluating the existingImplementing, enforcing and continuously evaluating the existing

legislative framework, setting up accurately the betterlegislative framework, setting up accurately the better

regulation agenda for any future initiatives, improvingregulation agenda for any future initiatives, improving

supervisory convergence and strengthening European influencesupervisory convergence and strengthening European influence

in global financial markets.in global financial markets.

Practices to be adopted for the achievement Practices to be adopted for the achievement of the Commission’s objective:of the Commission’s objective:

Consolidation of existing legislation, Consolidation of existing legislation, with few new initiatives;with few new initiatives; Ensuring the effective transposition of Ensuring the effective transposition of European rules into national regulation European rules into national regulation and more rigorous enforcement by and more rigorous enforcement by supervisory authorities;supervisory authorities;Continuous ex-post evaluation whereby Continuous ex-post evaluation whereby the Commission will monitor carefully the Commission will monitor carefully the application of these rules in the application of these rules in practice –and their impact on the practice –and their impact on the European financial sector.European financial sector.

““Better Regulation” approach:Better Regulation” approach:

policy conception, open and transparent consultation at all levels, establishment of thorough and convincing economic impact assessments before launching a new proposal and ex-post evaluation of regulatory measures

purpose: - reduction of administrative costs for financial

institutions and - increase of competitiveness of the European

financial industry

Priorities for the achievement of consistent Priorities for the achievement of consistent application and enforcement of existing rulesapplication and enforcement of existing rules

– – Continued application of open and transparent policy Continued application of open and transparent policy making with extensive use of consultation making with extensive use of consultation mechanisms at all levels;mechanisms at all levels;

– – Simplifying and consolidating all relevant (European Simplifying and consolidating all relevant (European and and national)national) financial services rules;financial services rules;

– – Converging standards and practices at supervisory Converging standards and practices at supervisory level, while respecting political accountability and level, while respecting political accountability and current institutional boundaries;current institutional boundaries;

– – Working with Member States to improve transposition Working with Member States to improve transposition and to ensure consistent implementation;and to ensure consistent implementation;

Priorities for the achievement of consistent Priorities for the achievement of consistent application and enforcement of existing rulesapplication and enforcement of existing rules

(cont.)(cont.)

– – Evaluating whether the existing directives Evaluating whether the existing directives and regulations are delivering the and regulations are delivering the expected economic benefits and repealing expected economic benefits and repealing measures that do not pass this test; andmeasures that do not pass this test; and

– – Ensuring proper implementation and Ensuring proper implementation and enforcement, if needed, by infringement enforcement, if needed, by infringement procedures building on existing legislation procedures building on existing legislation and case law.and case law.

A three step approach for efficient and A three step approach for efficient and effective supervisioneffective supervision

1. Agreeing on overall policy objectives

2. Maximising the current framework, identifying gaps and

developing existing tools by– removing inconsistencies found in and between

Directives especially on cross-sectoral issues– providing greater clarity in the roles and

responsibilities of supervisors and– converging practices of the three EU supervisory

committees (CESR, CEBS and CEIOPS)

3. Developing new structures if necessary

Issues to be further consideredIssues to be further consideredCodification and possibly simplification of existing rules onCodification and possibly simplification of existing rules on information requirementsinformation requirements, in particular with a view to ensuring, in particular with a view to ensuring consistency and coherence between different texts;consistency and coherence between different texts;

Financial mediation,Financial mediation, in particular by allowing cross-border service in particular by allowing cross-border service provision by knowledgeable and reliable intermediaries, while provision by knowledgeable and reliable intermediaries, while applying full transparency on fees and relationships with providers. applying full transparency on fees and relationships with providers. Work has already been done in this area under the Insurance Work has already been done in this area under the Insurance Mediation Directive and the Markets in Financial Instruments Mediation Directive and the Markets in Financial Instruments Directive. However, given developments in products and the Directive. However, given developments in products and the structure of financial providers, the need for further alignment of structure of financial providers, the need for further alignment of rules on conduct of business, sales advice and disclosure should be rules on conduct of business, sales advice and disclosure should be examined;examined;

Bank accounts,Bank accounts, in particular looking into obstacles to opening in particular looking into obstacles to openingaccounts cross-border, as well as issues regarding their handling,accounts cross-border, as well as issues regarding their handling,portability, transferability and closure. There appear to be particular portability, transferability and closure. There appear to be particular problems associated with, e.g. non-residency and identification problems associated with, e.g. non-residency and identification requirements.requirements.

““Exchange of Views” on Financial Services Exchange of Views” on Financial Services Policy 2005-2010 ReportPolicy 2005-2010 Report

Is the European Commission addressing the right Is the European Commission addressing the right priorities?priorities?

Are there areas where regulatory or supervisory steps Are there areas where regulatory or supervisory steps need to be filled or- on the contrary –where regulation need to be filled or- on the contrary –where regulation is obsolete and can possibly be withdrawn? Andis obsolete and can possibly be withdrawn? And

Are initiatives suggested in the “Asset Management” Are initiatives suggested in the “Asset Management” and “Retail Financial Services” areas the right way and “Retail Financial Services” areas the right way forward?forward?

“…“…so lets work together to build this so lets work together to build this financial strength and the most vibrant financial strength and the most vibrant capital markets in the world. There is no capital markets in the world. There is no time to waste. But at least now, we are on time to waste. But at least now, we are on the right path”.the right path”.

Charlie McCreevy, European Commissioner for Internal Market andCharlie McCreevy, European Commissioner for Internal Market and

Services, commenting on the Green Paper, Brussels, 18.7.2005Services, commenting on the Green Paper, Brussels, 18.7.2005