The Deputy Governor discusses some of the issues to be faced in the field of banking and financial services as the European Community moves towards completion of the internal market. He stresses that, if the single market is to be a success, the principle of steady, practical and realistic progress must remain paramount; and the Community's regulatory approach must be based on competition, liberalisation and decentralisation, with no attempt to shut out those from outside Europe.
The Deputy Governor argues that an attempt to impose complete harmonisation in regulation of banking and investment services in one step would be disruptive and confusing. Instead, applying the principles of mutual recognition of other member states' supervision and harmonised minimum capital standards-principles which are incorporated in the Commission's proposals-provides the best way forward at this stage. Finally, he emphasises that, while access to financial markets may sometimes have to be restricted in the real world, the reciprocity tests in the Second Banking Directive run the risk of driving business out of Europe rather than offering advantages to it; instead, the rules should be discretionary and operated locally by experienced professional supervisors.
Target 1992 - Speech by the Deputy Governor at a conference