New directives for the banking and insurance sectors in the European Union are to be brought in a bid to remove stifling regulation, it emerged tonight.
EU Commissioner for Internal Markets, Charlie McCreevy warned that the financial sector across the 25 member States had not yet realised its full capacity. And the former finance minister said further opening of borders and markets and relaxing of rules would allow companies and investors to trade more easily.
"I will not be adopting a scatter-gunned approach. What we do will be cautious and well-targeted, with the intention of delivering benefits to both consumers and businesses," he said. "I am sure that we can succeed, as long as member states are willing to negotiate in a constructive spirit and do not seek to export their own consumer protection rules."
Mr McCreevy said the financial sector across Europe can and must become more competitive or risk going stale.
He noted companies which have attempted cross-border mergers or acquisitions and had identified the complexity of the approval process, the misuse of supervisory powers and the risks of political interference as major stumbling blocks.
And he told an audience at the Central Bank & Financial Services Authority of Ireland in Dublin that some supervisory bodies were playing fair, while others were not. "I cannot see why an institution which has been authorised in one member state on the basis of a strict EU prudential framework, which carries out business successfully and without raising any prudential concerns in several other member states, cannot be authorised elsewhere in the EU," he said. Mr McCreevy revealed he was going to propose amendments to the relevant banking and insurance directives in order to guarantee that supervisors do not unduly obstruct cross-border consolidation. He said a more standardised approach to rules and regulations would improve cross-border deals and encourage wider investment. Mr McCreevy also offered words of warning for regulators across the EU.
"Don't try to protect everyone from every possible accident. Concentrate on the big things that really matter. And leave industry with the space to breathe and investors with the freedom to learn from their mistakes," he added.