European Bankers And Insurers Call For Harmonisation of Financial Services

by Ulrika Lomas, for LawAndTax-News.com, Brussels

31 January 2006

The European Financial Services Round Table (EFR), and the heads of leading European banks and insurers, have called for the patchwork of consumer protection rules for retail financial services products across the European Union to be harmonised in order to remove barriers for consumers attempting to choose the right products corresponding to their needs.

In its second report on consumer protection issues which was launched today, the 20 Members of the EFR describes in more detail how consumer protection rules in retail financial services could be converged, if not harmonised, across the EU.

“In Europe we have a patchwork of different consumer protection regimes. It is one of the main obstacles to an integrated retail financial services market for the benefit of customers," observed Michel Pébereau, who sponsored the new report.

Pébereau went on to add that:

"It is very difficult for consumers to benefit from competition between providers of various countries. The former experience practical obstacles - like e.g. different terminologies, different calculation methods, and different information for similar products, uncertainty regarding the relevant legal regime - when comparing financial services products and shopping around Europe.

"To find a way out of this gridlock it is necessary that lawmakers find more efficient ways to create a robust consumer protection regime, which functions all over Europe and has the confidence of EU consumers. If you look at the ongoing debate concerning the current proposal on a consumer credit directive it becomes apparent that integration of retail financial services is not an easy job. The Members of the EFR are convinced that some essential issues have to be fully harmonised. Diverging national rules should be few and should not be essential issues. They should be mutually accepted by other Member States."

The EFR says that an important first step to overcome the fragmentation of the financial services marketplace would be the introduction of a mandatory Pan-European Info Box (PEIB). Consumers would then be enabled to compare products at a pre-contractual stage by the standardised provision of relevant product information.

The EFR also recommends that a thorough case-by-case analysis should be undertaken to identify those financial services product types which would be eligible for further integration in the short and medium term.

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