Ireland's EU Commissioner, Charlie McCreevy, has said that he will aim to produce a high quality rather than a high volume of legislation when finalising the Financial Services Action Plan (FSAP).
His comments follow criticism yesterday of aspects of the plan by Sir Callum McCarthy, chairman of the UK Financial Services Authority.
The so-called markets in financial instruments directive is a component of the overall plan that aims to remove barriers to financial institutions offering their services across the EU.
A UK consultancy firm, Atos Origin, has estimated that this component of the FSAP would burden UK banks with adjustment costs of £1.5 billion. The plan itself is the output of his Internal Markets and Services Directorate. Its objective is to create a more level playing field across the EU's wholesale and retail financial markets, including in the areas of mortgages and investment funds.
Next month Mr McCreevy's directorate will produce a cost benefit analysis of a proposal to create a harmonised mortgages market. Relevant interest groups will be consulted over November and December. This week the directorate produced a green paper to prompt discussion. The EU mortgage market is worth an estimated €4 trillion, less than 1 per cent of which relates to cross border mortgages.
Mr McCreevy said he would subject any proposed legislation to the strict test of whether it produced clear economic benefit and would not proceed with legislation that failed it. "I am not going to proceed with a whole raft of legislation burdening business unless there is a clear business case for interference at EU level or if it is going to make matters worse."
On the services directive, Mr McCreevy said that work would proceed as originally envisaged. The European Council postponed a final decision on the directive, fearing that it might endanger passage of the referendums on the EU constitution in France.
Mr McCreevy said that the directive would not survive in its present form."I am hoping that a broad consensus will emerge in the European Parliament, but we will not get the proposed directive through in its original form."
