Task force to reform financial service laws

Date: 07/01/1999

By Renée Cordes

EU MEMBER states are set to appoint high-level finance ministry officials to a new task force which will lay out priorities for reforming Union-wide laws on a broad range of financial services.

The UK, Sweden and the Netherlands are planning to send their top ministry officials in charge of financial services to serve on the panel, to advise Internal Market Commissioner Mario Monti on how to remove hurdles to a true single market for financial services.

Monti, the group's chairman, sees this as a sign that member states intend to take reform of the banking, insurance and pension fund markets seriously.

"There is not much history of policy discussion on financial service regulation," said one diplomat. "It is very technical in nature and has been so far dominated by technical experts. It could be useful to look at things from a different angle for a period of time and to see whether policy objectives can be reflected in technical solutions."

The group, which is scheduled to hold its first meeting later this month, is expected to address issues such as liquidation and solvency. It is also likely to consider whether wholesale financial services, such as pension funds, should be regulated differently from retail operations such as banks which deal directly with consumers. The group will also help the Commission to monitor the enforcement of Union financial service laws.

It is due to present a report to EU finance ministers in June, although it is not expected to draft specific legislative proposals.

Some critics argue that while the Commission is taking the right approach, they fear the panel will have little time to make any real impact on EU policy.

"This approach has worked in the past, but there is still so much to be done and they are a bit late," said Karel Lannoo, an analyst with the Brussels-based Centre for European Policy Studies.