|
|
The report is an annual analysis of the integration in the EU financial sector and its effects on competition, efficiency, financial stability and competitiveness.
“It is still difficult to fully assess the structural effects of the financial crisis”, Commissioner McCreevy said. However, the crisis has underlined the important task that market participants and regulators have in ensuring that appropriate rules and incentives are in place to increase the resilience of the financial system, the report says. What is particularly pressing is the need to better locate and mitigate risks arising from cross-border institutions.
The report finds that EU markets are still in different stages of the financial integration process, and retail services still remain local, with major price differences and low levels of cross-border transactions. Especially in the New Member States there seems to be room for consumers and businesses to benefit from further integration, it says.
As to the efficiency, the report notes that as a result of the financial crisis, both efficiency and profitability have deteriorated for the large euro area banks compared to their US counterparts. However, new structural changes are on the way, the report notes. China, India and the Middle East are increasingly developing as global financial centres and their demand for global financial services are also increasing. International co-operation must clearly be reinforced in order to safeguard global financial stability and avoid any regulatory loopholes, the report notes.
European Financial Integration Report 2008