To ask the Secretary of State for Trade and Industry what progress has been made by EC member states towards providing for a single market in financial services with respect in particular to cross border branch networks and to cross border investment by one financial institution in another.
[holding answer 19 February 1992]: The United Kingdom financial services sector already conducts a great deal of cross-border business either through subsidiaries or under the freedoms enshrined in the treaty of Rome. The single market programme was designed to facilitate this further by allowing insurance companies, banks, building societies and investment firms the ability to conduct business throughout the EC on the basis of home state authorisation.Political agreement has been reached on a directive creating more freedom in non-life insurance and should be adopted by the Council of Ministers before the summer. Adoption of its sister directive on life assurance is expected by the end of this year.The adopted second banking co-ordination directive will, from 1 January 1993, enable a credit institution—a bank or a building society in the United Kingdom—to branch and offer services into other member states on the basis of certain agreed minimum standards. The supervisory arrangements to deal with cross-border investment by credit institutions in groups which include a bank will also be covered by the second banking consolidated supervision directive which is expected to be adopted shortly.Negotiations on the investment services directive, which is intended to allow investment firms to establish branches and provide services throughout the EC subject to minimum standards, are stalled over draft provisions which would impose rules and restrictions on where and how financial transactions are undertaken. The United Kingdom supports the view of a number of member states that these measures would not open the EC investment services market and the directive would, in its current form, hinder the single market in financial services.