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Financial Services Action Plan: expert group reports on financial integration: frequently asked questions

European Commission - MEMO/04/106   06/05/2004

Other available languages: none

MEMO/04/106

Brussels, 6th May 2004

Financial Services Action Plan: expert group reports on financial integration: frequently asked questions

(see also IP/04/600)

What mandate were the expert groups given?

The expert groups were asked to assess progress made under the FSAP in removing regulatory/legal barriers to the provision of services, to the performance of financial transactions and to the organisation of business on a cross-border basis. In particular, the groups were invited to provide a systematic and comprehensive understanding of:

  • the extent to which the EU framework of financial legislation has removed regulatory, supervisory, administrative or other public policy impediments to organising activities or business functions on a pan-European basis

  • ways in which the European legislative and supervisory framework could be further enhanced to ensure that FSAP measures deliver their intended effects in ensuring effective market access, and cost-effective protection of public policy goods such as market integrity and investor confidence

  • any additional regulatory or public policy barriers which materially hamper the organisation of financial segments or business functions on a pan-European basis.

Over 90 high-calibre experts took part in the review. A list of group members is annexed to each of the reports. Group members included key decision-makers, compliance officers and operational staff from companies who deal, on a daily basis, with the legal and administrative complexity of doing financial business across borders. The composition of the groups was carefully considered to ensure coverage of all main business lines and categories of institution, to ensure geographical balance - including knowledge of the new Member State markets - and to get input from both service providers and investors/market-users.

How were the reports drawn up? Were participants acting in a personal capacity or as representatives of their institutions and companies ?

The reports reflect the outcome of discussions within each group over the period November 2003-April 2004. During this period, each group met four times on the basis of an evolving draft of the report. In the limited number of instances where points of view could not be reconciled, this is made clear in the body of the reports. The reports do not necessarily reflect the views of the organisations to which the group members belong. They reflect consensus within the group not the views of the Commission, the wider industry or other stake-holders.

When will Commission come forward with its formal position on the analysis and recommendations of the four groups? What form will this take?

The publication of the expert group reports is not the end of the Commission's stock-taking exercise it is the starting-point. The four reports together represent a considerable mass of material which the Commission along with stakeholders and regulatory and supervisory authorities will need time to consider before reaching preliminary conclusions. It is possible that issues or concerns have been overlooked and that other constituencies may wish to bring alternative points of view to the table. It is premature at this stage before the debate on key policy issues and priorities has begun - to predict the content, nature or status (Green Paper, White Paper etc) of any eventual Commission position.

The FSAP "stock-taking" is not the prelude to an ambitious new legislative programme. The FSAP has broadly achieved its aims. It does not appear likely that a further comprehensive programme of legislative action on the scale or scope of the FSAP will be needed. Nevertheless, where open consultation and debate suggest that regulatory or administrative obstacles continue to hinder the functioning of an efficient and integrated financial market, targeted legislative action may be appropriate and should not be ruled out.

How does the work of the expert groups and the Commission review link with the report of the Financial Services Committee, which will be submitted to Finance Ministers on 2 June?

The Commission FSAP review is only one part of a wider reflection on future directions of EU policy in this area. This reflects increased interest in harnessing the full wealth and job-creating potential of financial markets through effective integration and regulatory reform.

The Financial Services Committee (FSC) a committee of senior Finance Ministry officials from the Member States was asked by the EU's Council of Finance Ministers in autumn 2003 to prepare a report examining progress on financial integration. The FSC report will also analyse key areas where further financial integration could deliver substantial economic benefits and advise on those areas where progress needs to be made as a matter of priority. A draft of the FSC report was presented to the informal meeting of Finance Ministers on 2 April 2004. A full debate is due to be held at the Council of Finance Ministers on 2 June. The FSC has been asked to take account of the output of the four expert groups when finalising its report. The FSC report and Council debate will be an important milestone in the debate on future directions for financial integration after the FSAP.

In terms of content, there is much common ground between the FSC report and the Commission's post-FSAP expert groups. In particular, both the FSAP expert groups and the FSC lay great emphasis on better prioritisation, improved justification and effective targeting of EU financial services initiatives. EU measures should only be introduced where there is a real expectation that they can materially improve the conditions and prospects for cross-border business.

To what extent were consumer/user interests represented in the expert groups? How does the Commission intend to correct any 'industry' bias in the reports?

Representatives of consumers and shareholder organisations were invited to participate in each of the expert groups. Despite a conscious effort to ensure effective representation of consumers/shareholders in the expert groups, it remains difficult to get input from this perspective on the nuts and bolts of financial regulation. Consequently, composition of the groups was weighted towards professional market participants. One of the key objectives of the consultation process is therefore to validate the assessment of the expert groups against the views of other stakeholders consumers, investors, issuers and regulatory and supervisory authorities.

The Commission is taking particular steps to encourage representatives of end users to contribute to the debate through its recently-established FIN-USE network (see IP/04/450, IP/03/1119). FIN-USE comprises twelve financial services experts, responsible for providing policy input to the European Commission on European financial services issues from the point of view of users of those services (in other words retail consumers and small and medium-sized businesses).

The Commission is also exploring these issues with other key constituencies such as trade union organisations. The Commission hopes that all stakeholders will take advantage of this consultation process to set out their clear views on the way forward for financial integration policy.

What was the role of Commission staff in the running of the groups and preparation of the reports?

The role of Commission staff in the groups was to facilitate discussions by providing secretarial support in organising and hosting the meetings, and acting as the chronicler of group discussions. In this latter capacity, Commission staff faithfully stuck to their role of recording the main lines of discussion amongst group members. Consequently, the expert group reports represent a fair presentation of the views of their members and not of the Commission. They should not therefore be construed as reflecting the views of the Commission.

Why are the reports only being made available in English?

The Commission regrets that it is unavailable to make translations available in other official languages due to the tremendous pressure on its translation services arising from the accession of ten new Member States. However, German and French translations of the cover document (explaining the context and consultation procedure) as well as the executive summaries of the four reports will be placed on the Internal Market DG's web-site:

http://ec.europa.eu/internal_market/en/finances/actionplan/stocktaking.htm


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