UK financial services bodies are calling on the European Commission to establish a genuine single market that eliminates unnecessary barriers to doing business across the EU.
Trade associations including Aifa and the ABI have written a joint letter to EU internal market commissioner Charlie McCreevy in response to the EU Commission’s recent Retail Financial Services Green Paper.
The letter argues cross-border sales of financial products are not a primary concern for financial institutions in Europe because local market differences mean there is little demand.
It also calls on the Commission to focus on consolidating and applying the way existing legislation is applied in European retail markets, rather than burdening the financial services industry with new and potentially costly legislation, except where there are clear benefits.
The letter points out that the UK financial services industry is the most dynamic in Europe, generating 8.6 per cent of gross domestic product in 2005 and employing around 1.1 million people.
ABI spokesperson Erfan Hussain says the ABI supports the emphasis in the Green Paper on maximising consumer benefit, empowering consumers and promoting consumer confidence.
He says: “These are three essential goals if Europe’s citizens are to reap the benefits of an integrated retail market in financial services.
But he adds: “Without full consultation and rigorous cost-benefit analysis, there is a risk that regulatory initiatives will lead to unintended consequences for consumers and providers alike.”
Aifa director of public affairs Tracey Mullins says regulation should not be turned to in the first instance.
She says: “Our main aim for getting involved is to send a message to the Commission that regulation should be the last resort, not the first.”