12 October 2004

FIN-USE criticises the four reports of stocktaking groups on FSAP

The expert panel FIN-USE set up by the Commission to give opinions on financial services from a “user” perspective has delivered its first opinion on the four stocktaking group reports produced in May 2004. FIN-USE finds that the reports largely ignore concrete user concerns. This may be the result of the fact that the Expert Groups were composed almost entirely of staff from financial services providers.

The four Reports imply that user interests are best protected by competition, reductions in cross-border barriers, and the prioritisation of self-regulation over binding regulation, supporting a new principle of supplier home country control in contract.

FIN-USE favours consumer home country control, is sceptical about self regulation and would wish to see greater user involvement in the Lamfalussy processes.

FIN-USE key recommendations include:

The user perspective should be properly considered at all levels of policy making including in the Commission, the Lamfalussy committees and national regulators.

Product providers tend to focus on the control of intermediary distribution channels, which results in high commissions to intermediaries, high charges to consumers and a lack of transparency.

The advantages for users of a self-regulation by the industry, particularly at EU level, are questionable.

Consumer and small business protection regulation should be based on user home country control, with minimal harmonisation.

Corporate governance should play a key role in protecting all stakeholders ( not just shareholders) in the financial sector.

Furthermore, the Commission published the responses to the Post-FSAP Expert Group reports. The responses can be downloaded here

Press release
Report

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