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White Paper on Financial Services Policy (2005-2010)

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White Paper on Financial Services Policy (2005-2010)

This White Paper presents the European Commission's financial services policy priorities from 2005 to 2010. The Commission considers it essential that the progress of the Financial Services Action Plan (FSAP) continue in order to open up untapped potential for economic growth and employment in the financial services sector of the European Union. The consolidation of the progress achieved the elimination of remaining barriers and the improvement of legislation and controls are the leitmotifs of the White Paper for the period 2005-2010.


Commission White Paper of 1 December 2005 on Financial Services Policy 2005-2010 [COM(2005) 629 final - Not published in the Official Journal].


The dynamic consolidation of financial services

Completing the single market in financial services is a crucial part of the Lisbon economic reform process.

In this context, the integration of European financial markets envisaged by the Financial Services Action Plan for 1999-2005 (FSAP) proves to be essential, as it will open up considerable potential in terms of growth and employment that has not yet been tapped.

In the White Paper, the Commission lays down the main aims of its policy for the next five years:

  • consolidation of the progress achieved;
  • completion of current measures;
  • enhancement of supervisory cooperation and convergence;
  • removal of the remaining barriers to integration.

The document thus identifies a number of priorities, in particular the increased efficiency of the pan-European markets for long-term savings products, the completion of the internal market for retail services and a more efficient venture capital market.

Better Lawmaking

Open consultations and impact assessments attached to new legislative proposals will continue to play a central role and will be required before any legislation is deemed necessary.

The Commission considers it important to strengthen the control mechanisms for the effective application of Community legislation; to do this, increased cooperation between the Member States is considered necessary. In order to facilitate the effective monitoring of progress:

  • the annual Progress Report on financial services will give an account of the overall rate of transposition and the online FSAP transposition matrix will be updated regularly;
  • the transposition workshops with Member States and European regulators will continue to play a central role in the implementation of particular provisions of EC legislation.

The ex-post evaluation of all legislative measures is a priority in the upcoming years. By 2009, the Commission will endeavour to have completed a full economic and legal assessment of all FSAP measures.

The Commission is planning a number of targeted initiatives to strengthen the coherence and consistency of the body of law which includes the Community and national implementing measures for legislation on financial services. In detail, the plans are to:

  • bring together the relevant Community instruments on the Internet;
  • check sectoral consistency in the securities field;
  • detect, through a study to be carried out in 2008, any inconsistencies in the information supplied in response to the requirements in the existing EC rules;
  • publish a Communication/Recommendation in 2006 concerning collective investments in order to resolve uncertainties from an information angle;
  • codify sixteen insurance Directives concerning the framework for the Solvency II project into a single directive;
  • where any incorrect implementation of Community law is found, take appropriate action, including the opening of infringement proceedings.

Users make an important contribution to the definition of European policy on financial services. Accordingly, the FIN-USE forum plays an essential role.

Furthermore, the Commission considers that it is necessary to improve the transparency and comparability of financial products and to help consumers understand them better. The Commission will therefore write a periodic newsletter to explain the most relevant user/consumer aspects of its ongoing work.

The efficiency of FIN-NET, the network for the out-of-court settlement of cross-border disputes in the financial services sector, will be improved. In the coming years, the Commission plans to strengthen the synergy between financial services policy and other policy areas, particularly competition, consumer affairs and taxation.

With regard to taxation, the Commission intends to present a legislative proposal to adapt the rules on VAT on financial services to changes in the single market for financial services.

EC regulatory and supervisory structures

Community policy on the regulation and supervision of financial services is based on the four levels of the Lamfalussy process. The Commission intends to develop this process over the next five years. The key regulatory policy issues are:

  • to continue the debate on comitology reform;
  • to improve the system of accountability and transparency;
  • to develop cross-sectoral regulatory cooperation;
  • to ensure that the four levels of the Lamfalussy process respect the Better Lawmaking agenda;
  • to contribute to the global convergence of standards.

It is extremely important for the supervisory authorities to cooperate and exchange information, and the Commission wishes to encourage this by:

  • clarifying and optimising the responsibilities incumbent upon, respectively, the Member State of origin and the host Member State;
  • exploring the possibility of delegating certain types of tasks and responsibilities;
  • improving the efficiency of supervision, without increasing obligations and, consequently, reporting and information costs;
  • ensuring faster and more consistent cooperation, and contributing to the development of a European supervisory culture.

Ongoing and future legislative activities (2005-2010)

The Commission is currently involved in four legislative projects:

  • retail banking: the Commission will publish a White Paper on mortgage lending in 2006; two proposals for Directives will also be presented, one concerning payment services and the other consumer credit;
  • Solvency II: in connection with this project, the Commission will present a comprehensive draft text in 2007 with the aim of modernising regulation and supervision in the insurance sector;
  • review of qualifying shareholdings: the supervisory authorities must ensure more clarity and transparency. In particular, the Commission is planning to amend the Banking Directive (Article 16) and the Insurance Directive (Article 15) and to establish common supervisory criteria;
  • clearing and settlement: the Commission will carry out an extensive consultation and an impact analysis to assess the need for a framework Directive to make cross-border transactions for clearing and settlements carried out by operators in the sector efficient, safe and low-cost.

The Commission intends to conduct in-depth reflection in five fields, namely the elimination of unjustified barriers to cross-border consolidation, the E-money Directive, Insurance Guarantee Schemes, the Hague Securities Convention and the feasibility of optional instruments ("Article 26 scheme") in the financial services sector.

The Commission is planning two future initiatives in the field of investment funds and retail financial services which should bring benefits to the EU economy:

  • In 2006, the Commission will publish a White Paper on enhancing the legislative framework for investment funds. The general purpose of this document, which will be the result of a process of extensive consultations, is to offer soundly structured, well administered collective investment instruments which deliver the highest possible returns consistent with the individual investors' financial capacity and risk appetite. The risks and costs incurred by this type of activity must be duly communicated to investors;
  • In the Commission's opinion, the retail financial services market is still too fragmented and new measures need to be taken. In particular, the obstacles associated with all types of bank accounts (current, savings or securities accounts) must be removed, consumer choice widened and competition between service providers improved. In the field of credit intermediaries, the Commission believes that further investigation is needed.

The external dimension

As the standards set today on accounting, auditing and equity capital have an international dimension, the EU deems it essential to take a leading role in setting standards at global level, and in particular in the opening of the global financial services markets. The Commission intends to develop the dialogue on financial markets between the EU and the United States, and to extend cooperation to include other countries such as Japan, China, Russia and India. The EU needs to be represented strongly in international bodies, where it must be able to speak with one voice on sensitive issues such as money laundering, terrorism financing and tax evasion. European coordination in international fora (the Basel Committee, IAIS, IOSCO or UNIDROIT) needs to be stepped up.

The Commission undertakes to draft a report each year outlining the developments and progress achieved. Annex I to the White Paper gives an overview of the tasks or activities planned in the field of financial services.


In 2004, as the legislative phase of the FSAP was coming to an end, the Commission decided to take stock of progress on the integration of the financial markets in Europe and to launch a general consultation on the basis of reports from four high-level expert groups. The Green Paper on Financial Services Policy, which opened a public consultation in mid-2005, focused mainly on the implementation of existing measures and on cooperation, not on the proposal of new legislation. The resulting White Paper sets out the priority means for achieving the integration of the financial services market.


Commission Green Paper of 3 May 2005 on Financial Services Policy 2005-2010 [COM(2005) 177 final - Not published in the Official Journal].

This document presents the Commission's initial ideas concerning Community priorities for the financial services policy. This work is the result of the two-year consultation process which started with the work of four expert groups, followed by a wide public consultation.

Last updated: 12.04.2006