The European Commission today presented its new financial services strategy for the next five years, calling for greater convergence in rules and more competition, particularly in the retail area.

The commission concludes that the EU financial services industry has strong untapped economic and employment growth potential. Its new strategy explores the best ways to effectively deliver further benefits of financial integration to industry and consumers alike. In priority sequence it aims to: ensure sound implementation and enforcement of existing rules; push better regulation principles into all policy making; enhance supervisory convergence; create more competition among service providers, especially those active in retail markets; and, expand EU’s external influence in globalizing capital markets.

Today, it issued a white paper spelling out its plans. A consultative green paper was published in May of this year. The commission suggests that completing the single market in financial services is more and more recognized as one of the key areas for EU’s future growth and jobs, essential for EU’s global competitiveness and its economic reform.

Efforts need to continue in the next five years, it notes. “Only when rules are implemented on time and enforced effectively, companies and citizens can benefit from access to pan-European markets. National regulators need to speed up on implementation. The current regulatory framework must be free of inconsistencies and legal ambiguities. Supervisory practices and standards need to converge across Europe. Cross-border investments need to be encouraged,” it declares.

The previous efforts at integrating the EU financial markets focused mainly on the wholesale market, retail integration will become more important over the next period, the commission says. Barriers associated with the use of bank accounts will be examined, with a view to enabling consumers to shop around all over Europe for the best savings plans, mortgages, insurance and pensions, with clear information so that products can be compared.

Internal Market Commissioner Charlie McCreevy said, “European financial integration has really moved forward in the last five years. The challenge now is to consolidate progress and work together on applying the better regulatory disciplines. Our aim should be to create the best financial framework in the world. It means creating real, tangible benefits for the citizens and businesses of Europe through lower capital costs, better pensions, and cheaper, safer retail financial products. Our new strategy is practical, economics driven and citizen focused. Only in a few, targeted areas are new initiatives foreseen.”