The Commission formally launched a Green Paper consultation on Thursday to identify the barriers to a single market in consumer financial products and services such as bank accounts, loans, and insurance products.
“We don’t have a real single market for financial services,” said Jonathan Hill, the EU’s financial services commissioner.
“Only 3% of consumers have used bank services in another EU member state. Only 1% of loans in the euro area are made across borders. Credit card fees vary drastically between member states, as does the cost of similar insurance products,” he said in a speech to launch the Green Paper consultation.
Single market goal
“Our goal is that consumers should be able to choose the right product at the right price for them and that businesses should be able to offer their services to customers wherever they are in Europe,” he said.
"Consumers should be able to choose the right product at the right price for them."
The EU have already adopted a series of measures to improve services in the retail finance sector — the Mortgage Credit Directive, the Markets in Financial Instruments Directive (MiFID 2), and the Insurance Distribution Directive (IDD), – but says it wants to look at what else can be done.
The Green Paper and its potential follow-up actions are also designed to complement its drive towards Capital Markets Union (CMU) and its strategies for a Digital Single Market, and for the Single Market more broadly.
“We want a Single Market in finance for consumers to be of benefit to as many people as possible. Our focus therefore is on the vast majority of European citizens who don’t move from their home country,” Hill said.
The move was welcomed by the European Fund and Asset Management Association (EFAMA) which said it was a crucial part of efforts to rebuild confidence in financial markets.
“EFAMA has strongly supported recent regulatory pieces such as MiFID II,” it said in a statement..
“These are considerable improvements within the regulatory environment. In line with this, EFAMA fully agree that consumers need to be able to compare products to make an effective choice,” it said.
EFAMA said it wholeheartedly supported the creation of a single market for personal pensions, and the development of a pan-European personal pension products (PEPP) in line with the ongoing work by the Commission in its CMU Action Plan.
“The current fragmentation of the market makes economies of scale impossible to achieve and limits the choice of pension products and pension providers. A pan-European personal product would provide more options and better returns for savers and retail investors,” it said.