In this paper the commission described a total of almost 300 different directives that should be adopted in order to realise full mobility for goods, services, capital and persons within the European Community. Twentyfour of these directives concerned financial activities, including the liberalisation of capital movements. Almost all of these directives also came to be decided within the set time period, and a number of favourable conditions were created for bringing about more vigorous competition between the different EU member states. A lot has also happened in this field and contributed to strengthening developments within the EU with regard to both supply and demand for financial services. The most important driving force behind this development relates to the general internationalisation process, the new communication technology and the deregulation of parts of the government rules and regulations. When the euro was later introduced as the single currency in twelve EU member states, it provided the ‘finishing touch’ that abolished uncertainty over exchange rate developments in a large part of Europe. At the same time, there is some disappointment that it has not been possible to create a market completely without borders for all types of financial activities within the EU even more quickly, and that some obstacles still remain. These obstacles are partly linked to the rules and regulations governing financial activities - and it is therefore in principle possible to influence them. The EU is now working on implementing a financial services action plan, which should be implemented by 2005.

1  … but remaining deficiencies in the infrastructure On the other hand, things have moved rather more slowly with regard to integration of cross-border money market trading against collateral. This is because it is more difficult to equate the value of these different types of collateral when they fall under different national legal systems. Securities trading between different countries is on the whole made more difficult by the fact that the infrastructure has still not been adapted to making transactions between buyers and sellers in different countries as simply and cheaply as within individual countries. One of the most cited examples of obstacles to cross-border financial transactions is the cost of making payments from one country to another. Now there is an EC regulation that prescribes that the price of making payments in euro between countries should not be higher than the same payments within a country, but the underlying infrastructure has involved de facto higher costs for making payments across borders. Other examples of national differences concern provisions aimed at establishing good consumer protection, but which make it more expensive and difficult in practice to create an efficient competition across borders, as the suppliers of financial products must adapt their marketing strategies to each individual country. One might have believed that the Internet would break this national fragmentation and open up the way for a demand-based international market for traditional bank services, but so far electronic banking services have mainly been used on a national basis.