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03 january 2008

Retail financial services – observing fundamental principles

In its response to the Commission's green paper the FBF reminded that it actively supports the integration of retail banking markets.


French banks are convinced of the potential benefi ts of more integrated markets and consider that the development of a large European retail banking market will be good for consumers, the banking industry and to Europe's economy in general.

However, the FBF believes that the integration of retail banking markets must adhere to certain fundamental principles, which include :

> providing a framework that will ensure fair competition and prevent competitive distortions between lenders based in different countries ;

> preserving the vigour and effi ciency of national markets and making sure that the standardisation of business practices does not limit their diversity ;

> focusing on initiatives that will offer the greatest benefi t to consumers and market participants ;

> ensuring that the cost of new rules does not exceed the expected benefits.

Moreover, the FBF has observed that the Commission has in general adopted the consumer's point of view. However, since consumer demand will depend largely on the supply of fi nancial products and services made available, for integration to move forward banks must not be discouraged from selling their products across national borders. The various obstacles to the cross-border provision of fi nancial services - whether linguistic, fiscal, legal or economic - must be taken into consideration.

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