The Dynamics of Inclusion and Exclusion
Edited by Peter Mooslechner, Helene Schuberth and Beat Weber
Chapter 5: The Construction of the Single Market in Financial Services and the Politics of Inclusion and Exclusion
Beat Weber* 1. INTRODUCTION Efforts to build a single financial market in the EU gained momentum around the turn of the millennium. In 1997, the Council approved the Risk Capital Action Plan. In 1999, the European Council took an even broader step with the Financial Services Action Plan (FSAP). In 2001 it approved the report of a Wise Men’s Committee under Chairman Alexandre Lamfalussy calling for a streamlined procedure for legislation in the securities area. One year later, this ‘Lamfalussy Procedure’ was envisaged to be extended to the areas of banking and insurance. When one considers that financial markets are widely held to be the embodiment of globality, fluidity and borderlessness, it might seem surprising at first sight that so much political effort is considered necessary to bring about integration. Why did market forces not bring about the single market by themselves? Apart from other integration barriers like language and broader policy regimes, financial markets rest on complicated governance arrangements which are still predominantly national and therefore do not encourage transnational transactions in most market segments. While some parts of the markets are heavily internationalized, many areas of the financial sector are geographically segmented (Verdier 2002). In important aspects such as the organization of supervision, there is no universally accepted model or ideal type of financial governance arrangement, so convergence pressure from market forces is not very strong. If the single market is to become reality and function properly, it must be constructed by deliberate effort (Piccioto * I want to...
You are not authenticated to view the full text of this chapter or article.