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The European Parliament calls for consumer-friendly single market in financial services
Here are two summaries about the latest European Parliament’s Economic Affairs Committee report which calls for a single market to emerge in retail financial services that delivers simple and transparent products for all consumers (from BEUC and the MEP Sven Giegold)

European Parliament calls for consumer-friendly single market in financial services - BEUC STATEMENT - 11.10.2016

The European Parliament’s Economic Affairs Committee has just agreed on a report which calls for a single market to emerge in retail financial services that delivers simple and transparent products for all consumers, not just cross-border ones. The report is expected to feed into and influence a European Commission plan early in 2017 which details upcoming policy proposals in retail financial services. The committee vote will be followed by a plenary vote in November to confirm the report as the parliament’s official position on the matter.
Monique Goyens, Director General of BEUC, The European Consumer Organisation, said:
“The European Parliament has issued a powerful rallying call: put consumers first in retail finance. Too often, legislators say they are going to change the financial system to benefit consumers, but the rules get heavily lobbied to favour existing business models. Today, the Parliament is setting consumer protection as its priority. I urge the Commission to take this report on board and start putting this principle into practice. “Consumers face an increasingly complex market of financial products. What consumers really need is simpler, more transparent and more standardised products. It is also crucial that all consumers are protected to high standards across Europe, without which there will never be a single market.
“Interestingly, the Parliament has stressed the need for better, more independent advice for consumers when they take financial decisions and recognises the detrimental effect of commissions in product mis-selling. This is welcome, although banning those commissions altogether would be the way forward.”

The European Parliament’s report calls, among many things, to:
• develop simple, portable and safe financial products as well as setting default product options
• ensure that digitalisation of retail finance does not lead to financial exclusion
• end unjustified geo-blocking in retail financial services
• more powers for consumer protection and funding to be given to the European financial supervisors for pensions & insurance (EIOPA), banking (EBA) and securities and markets (ESMA)
• ensure out-of-court dispute resolution bodies are truly independent and adhered by all financial firms.

Retail financial services: European Parliament makes a strong call to advance green finance and simple products - Post from on 13. Oktober 2016

The European Parliament’s Economic and Monetary Affairs Committee (ECON) voted this Tuesday on its proposal for the EU’s future work on retail financial services, such as insurances, investment products or payment services (the so called “Green Paper on Retail Financial Services”). This Green Paper sets the stage for the EU’s measures and legislative initiatives to allow consumers to benefit more from the Single Market, for example through an enlarged choice of insurance or investment products. Likewise, yesterday’s vote is the important basis for European Parliament’s answer to the European Commission’s Green Paper on the subject, adopted in December 2015. The next step will be a vote by the European Parliament’s plenary in November which is likely to follow the positions of ECON.

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:

“This vote was a milestone for greening finance. For the first time the economic and monetary committee urges the Commission to support sustainable and green investments. Now it is high time for the Commission to come up with an action plan for Green finance. A majority of MEPs also endorsed a strong call for simpler products, such as insurances or pension products. This has the potential to boost competition and comparability of products to the benefit of consumers. Lastly, digitalisation provides great opportunities for more efficient and consumer friendly financial services, if prudently managed. It was high time that the European Parliament recognizes now the chances of the FinTech revolution! ”
More specifically, a majority of ECON MEPs anchored the following key points in the voted text of the Green Paper:

Calling on the Commission to promote sustainable investment and green finance “Welcomes the Commission engagement in the area of encouraging finance for sustainable and green investments and urges the Commission, building on past consultations and closely involving the European Parliament, to play a more proactive role in using the Capital Markets Union, as part of the implementation of the Paris agreement, to support the growing Sustainable and Responsible Investment (SRI) market by promoting sustainable investments”

Encouraging simpler products that are easier to understand and compare
: “Emphasises, in particular in order to boost consumer trust and strengthen consumer satisfaction, that the Green Paper initiative can succeed only if it has a strong focus on creating an EU market in which well-protected consumers have equal opportunities and access to transparent, straightforward and good-value-for-money products; acknowledges the positive value of providing customers with simple, safe and standardised products; calls on the European Supervisory Authorities to regularly assess the impact of tying practices on prices and competition of retail financial services; calls on the European Commission to introduce a simple, standardised, portable and safe financial products framework; furthermore calls on the Commission to look into the possibility of creating a harmonised legal framework for standardised default options for the most commonly used EU financial products along the lines of the Basic Bank Account and PEPP-model” “Notes the increasing complexity of retail financial products; insists on the need to develop initiatives and instruments that improve competition and that allow consumers to identify and compare safe, sustainable and simple products within the range of products available to them (…)” “Considers simplifying legislation, which is facilitated by discouraging overly complex products and services, to be crucial in efforts to make products more easily comparable across the EU’s various markets, particularly in the insurance sector;”

“Fintech” can create new, better financial products and allow consumers to reap a greater benefit: “Whereas the rapid transformation brought about by digitisation and fintech innovation not only has the potential, if prudently managed, to create new and often better financial products for consumers and contributes to financial inclusion including by means of lowering transaction costs and easing the access to finance, but also involves key challenges in terms of security, data protection, consumer protection which do not effectively enhance consumer protection and go beyond MiFID II itself; calls for lessons to be learned from this experience” “Stresses, not least given that otherwise positive digitisation processes could trigger exclusionary tendencies, that the financial inclusion perspective should always be kept in mind, and that measures should be taken to ensure that all consumers have equal access to at least the most essential financial services also through non-digital channels to avoid financial exclusion;”

Stressing the fragmentation of Europe’s retail financial services “The EU market in retail financial services remain rather underdeveloped and highly fragmented, for example in terms of the low number of cross-border transactions, requiring urgent efficient action to unlock the full potential of the Single Market and to facilitate innovation beneficial to end users”

Calling for proportionality in financial market regulation citing the bad example of bureaucracy in MiFID implementation: ”Points out the shortcoming in the national implementation of the MiFID II directive, which has led in many cases to labour-intensive reporting requirements for intermediaries”

More transparency and more robust risk assessment for occupational pensions: “Calls on the Commission to follow up on EIOPAs proposal for a Common Framework for Risk Assessment and Transparency for IORPs, in order to promote a sound pillar 2 system across the Union, comparability of schemes and contribute to a better understanding of the benefits and risks to consumers by regulators, supervisors and consumers themselves;”

Requesting investigations on misleading features of financial services:  Asks the Commission to investigate further the confusing and sometimes misleading practices with which consumers are faced when making card payments and ATM withdrawals involving currency conversion, and to present a coherent solution that would make it possible, including in practice, for the consumer to understand and control the situation fully, including for payments relating to the digital market;

Further efforts to increase the provision of cross-border financial services: “Asks the Commission to study further the feasibility, relevance, benefits and costs of removing existing barriers towards the cross-border provision of financial services, thus guaranteeing domestic and cross-border portability in various parts of the retail financial services market; for example as regards personal pension and insurance products; (…)”

ID: 49062
Publication date: 20/10/16

BEUC statement on ECON Report

Comments from MEP Giegold from his website

Created: 20/10/16. Last changed: 20/10/16.
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