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The EU Financial Services Market: towards full Integration of the Banking, Insurance and Securities sectors.

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“Of all the elements in the process of economic reform set out at the Lisbon European Council, the achievement of the single European Financial Market is perhaps the most crucial one in creating the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion- (The Lisbon Strategy)“.(1)

The EU Financial Services Policy aims at creating an harmonized Financial Services Market for all Member States. The integration achieved at the beginning of 2010 is the result of a regulatory, supervisory, prudential and cooperation-based approach which contributes to liberalize both Capital Movement and Service Movement between Member States. The EU investment and savings framework in both wholesale markets and retail markets has gain consistency after a long-awaited evolution.

After the pitfalls of the EU minimum harmonization process in the 70’s, 80’s and early 90’s, the new EU Financial Services harmonization process starting in the late 90’s has gained valuable results namely through the implementation of the FSAP (Financial Services Action Plan), the adoption of the Lamfalussy Report and the subsequent post-FSAP modifications.

With the possibility for the « professionals of the Finance » to establish freely and provide Financial Services in all Member States on an equal footing with the domestic institutions, and with an effective access to financial instruments for all EU citizens, the EU Financial Services regime has achieved the main part of his goal in accompanying the wishes of the European Community Treaty which contained, in the section on the Principles of the European Community, references to free movement of goods, persons, services and capital and undistorted competition.

However EU Banking Markets still remain fragmented, in particular at the retail level and the efficiency of the EU Financial Services system shall still be improved and modernized in order to on the one hand, finance innovation and lead to economic growth in general and on the other hand, avoid another systemic crisis like the one which happened with the Bank system in 2008. In that way, that could probably be an argument towards the establishment of a new centralized regulatory institution, taking into example the one which already exist for the EU competition policy, that is to say the Commission which works together with the National Competition Authorities in the European Competition Net or like the one for the EU Monetary Affairs, i.e. the European Central Bank which works in the context of the European Central Banking System.

The post FSAP era has signed the route towards a fully integrated and maximum harmonized EU Financial Services Market however in the context of the White Paper for 2005-2010, the priority seems to be put rather on consolidation of the “Acquis communautaires” than on supplementary regulations.

[1] Creating a single European Market for Financial Services, Discussion Paper produced by a working group in the City of London,

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