29 June 2004

Speech: Trichet on Integration of the European Financial Sector

In a speech on the International Banking Event in Frankfurt, ECB President Jean-Claude Trichet lined out the achievements and the future challenges for an integrated European financial integration.

Mr Trichet lined out the need of closer co-ordination of supervisory actions especially for the major EU financial groups. Regulatory convergence has to be complemented by supervisory convergence. Therefore, the Lamfalussy approach will play a crucial role to financial regulation and supervision.

Furthermore, the issue of clearing and settlement lies at the core of all financial markets and is indispensable for their proper functioning. The ESCB and CESR are currently developing standards for EU clearing and settlement systems. A major malfunctioning in this area might have important implications for the financial system at large and threaten financial stability.

Identifying future challenges Mr Trichet lined out that the single financial market should be equipped with a consistent regulatory process.

“The private sector advises that further integration also depends on the extent to which regulation and supervision converge among national authorities. In this respect, I consider that the Lamfalussy process will allow for more flexible and uniform technical rules across Member States and lead to convergence in national supervisory practices.

“Second, the financial industry has the decisive role to play in the development of the single financial market. Market forces should ultimately drive the integration progress. Collective action by market participants has therefore to be organised at the EU level to overcome possible co-ordination problems in this process.

Full speech

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