The EU is on track to deliver an integrated financial services market, complete with harmonised regulation, by 2005 according to internal market commissioner Frits Bolkestein, writes Ian Fraser.
In a speech to financial leaders in the Scottish Parliament last week the Dutchman Frits Bolkestein said an integrated market in financial services would present Scottish banks, insurers and asset managers an unrivalled opportunity to boost their exports and cut their cost of capital.
“We are integrating our markets because we believe that there are massive long-term economic benefits in terms of market liquidity, a more rational allocation and this lower cost of capital and a greater freedom for investors and consumers.”
He added that three-quarters of Financial Services Action Plan (FSAP) measures adopted in May 1999 have now been delivered.
Asked by Mike Ross, chief executive of Scottish Widows, whether the EU is doing enough to ensure directives are applied by member states, Bolkestein said: “We have more work to do in supervising the transfer of directives. I have 1,500 infringement proceedings on my hands and luckily I don’t have to look at them all every day, as that would be an impossibility. But we are more attentive to the way the law is applied.”
He added: “We have far too many banks in Europe. If we want to withstand American competition we will need have a lot more cross- border mergers.”
Bolkestein has been seeking to persuade the UK government to reduce excise duties in the UK. “Britain has far and away the highest excise duties in the EU and one in four cigarettes smoked here is smuggled.”
This article was published in the Sunday Herald on 2 March 2003