European financial services regulation : seventh report of session 2005-06, report, together with formal minutes, oral and written evidence

The EU's ambitious Financial Services Action Plan, started in 1999, is drawing to an end.

A single market in wholesale financial services exists.

Many retail financial services institutions are expanding through acquisitions of banks and insurers across Europe, though the prospect of a single market in such services, with comparable products and services available to consumers direct across borders, is not a realistic proposition in the near future.

The Commission has set out its policy objectives for 2005-2010, attaching greater importance to consistent and workable implementation of existing legislation.

The Committee welcomes this, and the commitment to ensure that any new regulation will have a clear benefit to the European economy.

The Committee examined three specific case studies: implementation of the Markets in Financial Instruments Directive (MiFID), the consideration of a Clearing and Settlement Directive, and consideration of mortgage credit in the context of the development of a single market in retail financial services.

In all the Commission will need to demonstrate its commitment to "better regulation", and its new focus on implementation and enforcement. The Committee is concerned that MiFID will not be implemented consistently across Europe.

It finds that the case for a new mortgage directive remains unproven, and that there is a clear need to reduce the additional costs associated with clearing and settlement across borders.