EN Official Journal of the European Union CE 88/710

(2004/C 88 E/0731)

WRITTEN QUESTION E-0756/04

by José García-Margallo y Marfil (PPE-DE) to the Commission

(11 March 2004)

Subject: Repercussions of European financial market integration at national and regional level

Has the Commission carried out studies to assess the repercussions on national and regional financial markets of the structural changes introduced by new European legislation on financial services and, in particular, the possible weakening of regional financial markets vis-à-vis their national counterparts?

Is there not a risk that financial transactions will ultimately be concentrated in a limited number, i.e. three or four, markets in Europe?

Answer given by Mr Bolkestein on behalf of the Commission

(23 April 2004)

Even though the Commission has not systematically launched studies to provide an answer to the precise question of the repercussions on the national and regional financial markets of the changes introduced by new legislation on financial services, studies have accompanied certain legislative proposals (e.g. studies on supplementary pensions, which are publicly available on the web site of Directorate-General (DG) Internal Market; impact assessments of the forthcoming Reinsurance Directive and Capital Adequacy Directive (CAD 3), which will become public at the time of the Commission proposal, etc.) or assessed the situation of a specific market segment on a pan-EU basis (e.g. study ‘Creating an internal market for the Banking industry: an estimate on the structural changes induced by the deregulation and the single currency’).

In addition to these specific studies and impact assessments carried out, it is a general policy in proposing legislation in financial services to organise wide-ranging consultations with stakeholders before these legislative proposals are finalised. This procedure can help to determine whether or not a specific legislative measure might impact negatively on one particular regional or national market segment. Furthermore, it is the intention of the Commission to devote more importance to the impact assessment of legislative proposals on specific markets segments and/or regions in the future.

A study, commissioned by DG Economic and Financial Affairs (1), concludes that the benefits of further integrating EU financial markets would be shared, even though not equally distributed, by the Member States. Whereas in some Member States the industrial sectors would stand to gain more from access to non-domestic financial markets, the financial sector would gain in relative terms in other Member States following an increased demand.

In spring 2004, the Commission will produce a first annual report on the state of integration of the EU financial system. From this report, it is clear that, as integration proceeds, natural regional clusters (also cross-border) emerge, whereas other markets may be reduced in importance. The occurrence of a higher market concentration in the advance towards integration cannot a priori be excluded but eventually, regional and national markets are expected to reorganise to reap the benefits from increasingly integrated and liquid markets.

(1) ‘Financial Market Integration, Corporate Financing and Economic Growth’ by Mariassunta Giannetti, Luigi Guiso, Tullio Jappelli, Mario Padula and Marco Pagano (2002).