Steps are also being taken in the field of consumer protection legislation. The aim of the recently launched revision of the Consumer Credit Directive is to promote transparency and to ensure that cross-border credit can flow in harmonised conditions for both consumers and lenders. Also, a report on the regulation of e-commerce in financial services has just been launched by the Commission. It draws attention to the problems that arise from the interplay between different legal systems and makes proposals to overcome them.
At the supervisory level, the Economic and Financial Committee has stressed the need to work on the convergence of diverging national supervisory practices. The main motivation is to enhance the efficiency of the national supervisory authorities involved in monitoring cross-border financial institutions and thereby to improve financial stability. This is also linked to the new framework for capital adequacy rules being developed by the Basel Committee on Banking Supervision that will significantly increase the scope for supervisory discretion, leaving broad room for diverging implementation across Member States. Thus, demand for supervisory convergence is going to increase. To the extent that this is accomplished, the costs of banks with multi-country operations will also become lower.
In conclusion, I should like to stress that when talking about the requirements of the euro area banking system, we are not concerned with ordinary co-operation across Member States, as is necessary on account of the internationalisation of financial firms' activities. We talk about a single banking sector. This means that only substantially reinforced co-operation, combined with convergence in supervisory policies and practices, can deliver the conditions for a continued integration of banking activities. This will mitigate the potential risks to financial stability that stem from the new channels of contagion and will, in turn, benefit euro area economic activity.
BIS Review 91/2001