Lukewarm response to EC retail financial services green paper

BRUSSELS - Responses to the European Commission (EC) green paper on retail financial services - which set out its objective to open up the retail banking sector to competition to benefit EU consumers - vary, but the overwhelming consensus was for national retail financial regulation to remain.

Jörgen Holmquist, internal market and services director general, who presented the responses to the EC at a public hearing on September 19, said diverging consumer protection rules were seen as a major obstacle and underlined the need for harmonisation in this sector. Consumer groups, however, were vehemently opposed to maximum harmonisation, fearing it could dilute overall protection for the consumer.

Ieke van den Burg, Dutch Socialist MEP and a member of the committee for internal market and consumer protection, warned of Parliament's scepticism that the European Commission must avoid damaging existing national consumer protection traditions with a 'one-size-fits-all' approach. She argued instead that a "more focused and targeted approach" should be taken.

The findings from the September hearing will be incorporated into the final report of the EC's Single Market Review, due for publication in the autumn.

The green paper acknowledged the fact that, despite significant progress, markets within the EU are not fully integrated, and the retail sector in particular lacks competition in certain areas, so that consumers are prevented from reaping the benefits of lower prices. Harmonisation of EU financial services through the Markets in Financial Instruments Directive might change attitudes in the retail sector.