The European Commission published in December 2005 its White Paper on Financial Services, which completes a two-year process of consultation and contemplation launched by the Commission to determine the priorities for action in the post-FSAP phase. The process included a dialogue with expert forum groups and the publication of a Green Paper, the feedback from which is reflected to a large extent in the current document. Accordingly, the Commission’s actions over the next five years will be structured around five key priorities:

- to consolidate progress achieved and ensure an efficient implementation and application of existing rules;
- to apply the ‘better regulation’ principle to any future initiative;
- to improve convergence of supervision;
- to strengthen competition between financial service providers, particularly in retail banking, investment funds and insurance;
- to increase European influence on global financial markets.

All of which are supported by industry.

In deciding on the optimal policy mix for the period, the Commission has sought to identify clear parameters for objectives and options, introducing five generic policy options (see note 1 below). In certain areas (financial analysts, rating agencies) no further action is proposed at EU level, while “dynamic consolidation” is to be applied to supervisory convergence and elimination of barriers to cross-border consolidation. New initiatives, subject to impact assessment studies, would be envisaged for retail financial services, Solvency II, clearing and settlement of securities, and asset management. Dynamic consolidation is also the leitmotiv for the overall approach for the next five years.