WRITTEN QUESTION E-3479/02

by Philippe Herzog (GUE/NGL) to the Commission

(6 December 2002)

Subject: Extension of the Lamfalussy process and financial supervision

In the debate on extension of the Lamfalussy process and financial supervision at the plenary sitting in Strasbourg on 20 November 2002, the Commissioner responsible for the single market expressed his intention

of replying to each of the speakers. But he made one exception, omitting to answer the author of this question, who would like to know whether or not the omission was deliberate and now requests an answer to a concern expressed in his speech. He had expressed concern at the Union's tendency to converge in the direction of the United States rules, in the prospect of an integrated transatlantic financial market, without the European Parliament ever having debated any such objective.

According to the preparatory documents for the TABD meeting of 6 and 8 November 2002, the Commissioner for the internal market apparently stated on 29 May 2002, in a consultation with the President of the SEC, that he intended to provide the transatlantic world with one liquid and integrated financial market.

My question to the Commission is twofold:

1. Does this statement correspond to a mandate from the Council? Or from the Commission? Or is it a personal position? Has it been discussed, and if so, in what forum?

2. How does the Commissioner or the Commission justify this position?

Answer given by Mr Bolkestein on behalf of the Commission

(16 January 2003)

The Member of the Commission in charge of the Internal Market did indeed declare after his meeting with the former Chairman of the Securities and Exchange Commission (SEC) his long term objective to work towards providing the world with one liquid and integrated financial market and has made a number of similar public statements both before and since, most recently in a speech given on his behalf on 10 December 2002.

The reason why he called for such an integrated financial market is threefold.

Recent studies have pointed to the huge economic and social benefits to all sides from European financial market integration and the removal of regulatory barriers. The same should be true for transatlantic market integration.

European investors, companies and consumers are being punished by the status quo. The Lamfalussy Report listed external trade barriers, and in particular barriers in the United States' market (e.g. no access for trading screens) as one of the major factors slowing European market integration. In contrast, European markets are relatively open to United States companies and exchanges. These barriers are unacceptable and need to be addressed in the interests of companies and investors on both sides.

Most importantly, recent events have highlighted how actions in one country can and do have direct effects on companies in other countries. The Sarbanes-Oxley Act in the United States is a classic example of this.

The Commissioner believes that the solution to these issues is firm and effective upstream co-operation between authorities on both sides of the Atlantic. The aim should be mutual convergence around common principles whenever practicable, whilst recognising and respecting the right of each side to use different means of regulation. Contrary to what the Honourable Member's question suggests, this does not imply the adoption of United States rules. As part of this, the European Union-United States Positive Economic Agenda launched by Presidents Prodi and Bush in May 2002 called for a Financial Markets Dialogue on regulatory matters. Commission officials met with United States authorities on a number of occasions in 2002 and expect to have regular meetings in 2003 with a view to resolving these issues.

As such, while the statements referred to by the Honourable Member reflect the personal point of view of the Commissioner, they are totally consistent with European Union policy and Council mandates.

The Commission will continue to inform the Parliament of any progress made in this regard.