the financial services action plan which is due in principle to be completed in 2005. but everyone accepts that a great deal remains to be done - in the context of the integration agenda - and in fact it is bound to be an ongoing process as markets evolve and new issues arise. in that context the recent agreement on alexandre lamfalussy's proposals for a faster track procedure in securities markets has been generally welcomed. but the on - going debate extends beyond that to where more precisely we want to get to. at one extreme - and i exaggerate to make the point - some appear to have a vision of maximum harmonisation across the eu, with uniform regulation and centralised oversight at some point in the future, whereas others lean more towards harmonisation only to the extent to which it is demonstrably necessary, with mutual recognition, and an eu - wide passport based primarily on the removal of barriers to cross - border activity. of course that approach leaves plenty of room for debate about what exactly “ demonstrably necessary ” means. underlying the debate at that level are legitimate differences in priorities as between the different public policy concerns - how much weight to put upon consumer protection as against systemic stability or freer competition, for example, which are not necessarily easy to resolve even at the national level. and there may - just possibly - also be, less legitimate, differing perceptions of national self interest. the truth is that there are no easy answers, and i think myself that we are bound to move forward in a pragmatic, incremental, way - recognising the different considerations that apply in different areas of the markets rather than on the basis of a grand design. in this context, i am actually rather encouraged by the recent discussion papers put out by eurofi and the wicks group, which stand back a little from the more immediate issues and look at the way forward in a broader - and longer - term - perspective. they seem to me to have quite a lot in common in terms of immediate priorities, although there are important differences in terms of where we may ultimately end up. i welcome in particular their shared emphasis on involving practitioners in consultation on the way forward at every stage - indeed we might have made more progress if that procedure had been more generally adopted hitherto. i welcome also the emphasis in the eurofi paper on evolution - which is implicit too in wicks - but i am less sure about the eurofi presumption at this point of necessary and

all of which have now gone. it's true that plenty of regulation remains - reflecting public policy concerns relating essentially to competition, consumer protection and systemic stability. indeed it has intensified in these areas. it's hard now to imagine that we had no formal banking supervision at all in this country until about twenty years ago. but for the most part such regulation today does not tell us what we can and cannot do, rather it sets the criteria that we must meet, and the behavioural standards we are expected to observe, in doing whatever it is that we choose to do. it leaves much more room for both consumer and producer choice, including producers from overseas, and much more room, and more incentive, therefore for competition and innovation. and, in that less prescriptive, more permissive, environment, the new technologies have brought about massive changes in traded instruments, in the way in which markets operate and are organised and in payments, settlements and delivery arrangements and so on, which, while not without occasional problems, have overwhelmingly on balance brought massive benefits in terms of market efficiency. in reflecting on this whole process in the uk, there are a number of characteristics of the general approach that i think have been important. the first relates to the extent to which it was market - driven. no attempt was made as far as i am aware - certainly not by the bank - to tell market players what they should do individually or in organising themselves collectively. of course we followed what they were getting up to very closely, and always stood ready to help when we were called upon by the markets to do so, as we occasionally were, intervening on our own initiative only to ensure that the public interest was properly respected. for the most part we took the view that market participants know better than we do what will work and what won't ; it is after all their salaries if not their jobs that are on the line. where public policy issues were involved, we established a tradition of extensive consultation right across the relevant sections of the market - a tradition which the fsa has certainly maintained. in the uk's relatively well - developed markets - particularly the wholesale markets - we recognised early on that where intervention was judged to be necessary - in the interest of market transparency or of prudential or behavioural conduct for example - it needed to be informed by those who properly understood the subtleties of the market if we were to reduce the risk of unforeseen consequences which could either frustrate the