The European Parliament’s Economic and Monetary Affairs Committee has said the number of cross-border financial services transactions is extremely low and urgent action is needed.
The committee has adopted a green paper for greater integration for retail financial services aimed at consumers and at businesses.
The green paper means the European Commission is now tasked with increasing the provision of cross-border financial services by removing existing barriers and guaranteeing domestic and cross-border portability in various parts of the retail financial investment market.
MEPs further noted that financial services are becoming increasingly digitalised, which has the potential to create new and better products for investors by lowering transaction costs and broadening access, but also creates challenges in respect of data security and consumer protection that current legislation does not deal with.
Reaction to the vote has been positive. German Green MEP Sven Giegold says the paper is a “milestone” for green finance, as it urges the Commission to play a more proactive role in using the Capital Markets Union to promote responsible and sustainable investment products.
Christophe Nijdam, secretary-general of Finance Watch, welcomed the report, but felt it fell short in a number of areas. He called on the Commission to expand product disclosure rules for complex packaged retail and insurance-based investment products to shares and other investment products, and address the continued reliance on inducements to pay for independent financial advice.
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