European Commission releases retail green paper

The European Commission has set out its vision for future EU policy on retail financial services in a green paper.

The Green Paper aims to strengthen the Commission’s understanding of the problem faced by consumers using financial products such as bank accounts, loans, mortgages, investments and insurance. It also sets out the Commission’s overarching objectives, and highlights areas where more work may be needed.

“We want to create a real single market for retail financial services and bring a range of tangible benefits to European consumers: quality products that meet their needs, increased confidence in the products and services on offer, and better information and advice on which to base their choices. I invite everyone to give us their views on how best to achieve this,” said commissioner Charlie McCreevy.

The EU has long been planning to reassess the integration of retail financial sector, which does not seem to have kept pace with that of investment services. And the Commission is concerned that although retail financial services are an essential part of the everyday lives of EU citizens, integration in this area has not yet reached its potential and that competition is insufficient in some areas, leaving EU consumers unable to take full advantage of the benefits of the Single Market.

The Commission seeks to develop integration in retail financial services markets by ensuring that the provision of products meets consumers’ needs, offering choice, value and quality, through properly regulated open markets and strong competition. It also aims to give European consumers confidence to make the right choices, which can be achieved by ensuring consumers are properly protected where appropriate, and that providers are financially sound and trustworthy. Lastly, the Commission will seek to improve consumer confidence in seeking out the best deals to meet their needs, regardless of the location of the financial services provider, by empowering consumers to make the right decisions through financial literacy, clear, appropriate and timely information provision, high-quality advice, and a level playing field between products perceived as having similar characteristics.

Comments are invited to be received by July 16, and a hearing will be organised by September 19 to draw the conclusions of the consultation launched by the green paper, and discuss with all stakeholders what initiatives are needed to bring about a more efficient internal market for retail financial services.

The results of the consultative process will be incorporated into the Single Market Review, to be published in the autumn.