European Parliament Scrutinising Cross Border Financial Services

by Carla Johnson, Investors Offshore.com, London

22 April 2008

The European Parliament issued a statement last week addressing the need to increase the cross-border provision of financial services within the banking and insurance sectors.

Europe's large banking and insurance industry is still mostly national in emphasis, despite advances in communications, the Parliament observed.

A green paper published by the European Commission last year looked at promoting the integration of the retail market in financial services.

MEPs on the Economic and Monetary Affairs Committee looked at the issues raised in early April, and the full plenary is expected to debate it in June.

Retail business by banks is, according to the Parliament, responsible for 2% of the European Union’s GDP. An ageing population is increasing the need for private and industrial provision for pension, health and sickness insurance.

Among the proposals contained in the Green paper that MEPs will be examining are:

• Ways to promote the purchase of financial services through telecommunications;
• Progress in removing tax differences between EU members; and
• Broader access to credit history data registers.

Currently, only 1% of people get financial services from outside their national borders through telecommunications, according to the Commission.

Although a single market for retail services has been created and a legal framework that guarantees financial soundness is in place, there is still a long way to go toward harmonisation of payments and banking across the European Union, the European Parliament observed.

MEPs on the Economics Committee have appointed Austrian MEP, Othmar Karas (EPP-ED) as rapporteur for the issue.

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