Seminars

Recent bank failures have dramatically illustrated the insufficient harmonisation of deposit insurance in the EU. Memories of the run on Northern Rock (2007) or the failing Icelandic banks (2008/09) are fresh in many depositors’ minds. Designing an efficient scheme to underpin the single financial market is therefore a key policy priority.

One major concern in the aftermath of the financial crisis is the damage caused to the businesses, in particular to the SME sector which is the most important source of growth and employment creation in the EU. The weakening of SME finances will not only be caused by bank financing shortage but also by the cash flow damage from payment delays on outstanding invoices. What can policy makers do to mitigate this problem?

The Payment Services Directive (PSD) was published in late 2007, constituting the legal basis for the Single Euro Payments Area (SEPA). The industry initiative launched on 28 January 2008 is aiming at replacing fragmented national markets for payment services with one integrated system.

The provision of increasing amounts of new and innovative financial products as well as the expansion of access to credit and financial services is expected to prove beneficial to European consumers. However, the lack of financial education and literacy paired with insufficient information and advice may cause consumers to take unreasonable transaction decisions, potentially leading to financial difficulties and over-indebtedness.

High level speakers, ranging from policy and law makers to representatives from consumer and industry groups as well as national representatives to the Council on the Draft consumer credit directive and Karel Lannoo, CEPS CEO discuss on the different aspects related to the integration of retail financial markets in the EU and the currently interesting example drawn by the consumer credit directive.

An increasing part of consumer credit in Europe is now being provided at the point of sale. This practice has important implications for the future development of consumer credit in the European Union and poses major challenges to policy-makers responsible for EU regulatory policy in this area.

The objective of this ECRI seminar was to refocus the debate on consumer protection in financial services, with special attention to the foreseen revision of the Consumer credit Directive.