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2005-2010 Banking and Financial Europe Programme: French bankers propose a differentiated approach to harmonisation

The French bankers of the French Banking Federation (FBF) are convinced that developing efficient and integrated financial markets and a dynamic and competitive environment for banking services will be beneficial to consumers, financial institutions and Europe.

With the 1999-2004 Financial Services Action Plan (FSAP) approaching completion, in October 2003 the European Commission undertook an assessment of the progress that has been made. For this purpose, the FBF met with participants in each specific market to try to determine the most effective means of harmonising the European banking and financial sectors and has just submitted its proposals to Internal Market Commissioner, Frits Bolkestein.

Harmonisation, in the public interest's service

French bankers do not see harmonisation as an end in itself, but rather a means for progressively building "banking and financial Europe", in other words a unified market where everyone can easily access a broad and varied range of high-quality, reliable and competitive products and services capable of meeting their needs.

A pragmatic approach

In keeping with the FBF's "Five Principles for a Unified Banking and Financial Europe", released in June 2003, French bankers presented a series of operational proposals for achieving the following three objectives:

  • Adapt to real market requirements, without imposing a predetermined model
  • Ensure effectiveness - harmonisation must be useful, cost-effective and simple.
  • Promote healthy competition between enterprises in an environment that consumers can easily understand. Thus the principle of home-country law should not be implemented until all issues critical to cross-border competition are sufficiently harmonised.

Fundamental principles of the 2005-2010 work programme

Adopting a differentiated approach to harmonisation

French bankers believe that the same harmonisation model cannot be indiscriminately applied to all markets and requirements, and have identified five areas that require a distinct approach:

1. Accounting and prudential standards, which need to be systematically harmonised, without neglecting implementation and practices.

2. Investment and trading banking, where extensive harmonisation must be pursued, without however resulting in excessive regulation. A directive on post-market activities is absolutely essential.

3. The coordination of regulators, requiring resolute, gradual and pragmatic harmonisation.

4. The retail banking sector, for which harmonisation must be selective and reserved exclusively for areas where it is genuinely required and primarily for those aspects that are necessary to effectively compare competitive offerings.

5. Payment means and systems, where harmonisation involves technological and industrial aspects and considerable investment and should be left up to market participants.

Systematically using the most appropriate regulatory technique

In those cases where benefits are expected from the harmonisation of rules pan-European legislation and regulations will be necessary and must be backed up by increasingly close coordination and cooperation between regulators and supervisors.

If these principles are observed, harmonisation will be well thought out, focused on what is essential and promote competition while ensuring transparency and security.


Colette Cova
email : ccova@fbf.fr
Tel : 01 48 00 50 07

Kenza Benqeddi
email : kbenqeddi@fbf.fr
Tel : 01 48 00 50 08

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