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One of the key issues relating to the perfonnance of national economies is the efficiency of the financial system which stands at the heart of the capital-allocation process. There are two aspects which define efficiency. Static efficiency involves the ali-in difference between rates of return provided to ultimate savers and the cost of funds to users. This 'gap', or spread, reflects the direct costs of production (operating and administrative costs, cost of capital, etc.). It also reflects losses incurred in the financial process, as well as any monopoly profits earned and liquidity premiums. Financial processes that are considered 'statically inefficient' are usually characterised by high 'spreads' due to high overhead costs, high losses, barriers to entry, and the like. Dynamic efficiency is characterised by high rates of financial product and process innovation through time. Successful product and process innovation broadens the menu of financial products available to ultimate issuers, ultimate savers, or other agents along the various financial process channels described above. Probably the most powerful catalyst affecting the competitive dynamics of the financial services industry has been technological change.
List of contents
I Introduction, Summary and Consequences.- 1.1 The birth of the European Communities (EC).- 1.2 The EEC Treaty.- 1.3 The White Paper and the Single European Act.- 1.4 The internal market for financial institutions.- 1.5 Three freedoms.- 1.6 Strategies in 1993.- 1.7 Europe in 1993, the consequences for governments.- 1.8 Europe in 1993, the consequences for financial institutions.- 1.9 The road beyond 1992.- II Liberalisation of Capital Movements.- 2.1 Freedom of capital movements in 1993.- 2.2 Pre-1986 directives.- 2.3 The situation at the beginning of 1986.- 2.4 Directives since 1986.- III Credit Institutions and Investment Firms.- 3.1 Credit institutions and investment firms in 1993.- 3.2 Establishment and provision of services by credit institutions in the narrow sense.- 3.3 Coordination of credit institutions (I).- 3.4 Coordination of consolidated supervision of credit institutions.- 3.5 Coordination of annual accounts and consolidated annual accounts of credit institutions.- 3.6 Coordination of the publication of annual accounting documents of credit institutions.- 3.7 Coordination of provisions concerning own funds and solvency of credit institutions.- 3.8 Coordination of large exposures of credit institutions.- 3.9 Coordination of deposit-guarantee schemes of credit institutions.- 3.10 Coordination of reorganisation, winding-up and deposit-guarantee schemes of credit institutions.- 3.11 Coordination of consumer credit.- 3.12 Coordination of mortgage credit.- 3.13 Coordination of credit institutions (II).- 3.14 Coordination of investment firms.- IV Securities Markets and Undertakings for Collective Investment in Transferable Securities (Ucits).- 4.1 Securities markets and undertakings for collective investment in transferable securities in 1993.- 4.2 Coordination of the admission of securities.- 4.3 Coordination of public offer prospectuses.- 4.4 Coordination of information.- 4.5 European code of conduct relating to transactions in transferable securities.- 4.6 Coordination of undertakings for collective investment in transferable securities.- V Insurance Companies.- 5.1 The insurance market in 1994.- 5.2 Establishment and provision of services in the narrow sense.- 5.3 Coordination of non-life insurance.- 5.4 Coordination of motor vehicle liability insurance.- 5.5 Coordination of life assurance.- 5.6 Coordination of co-insurance.- 5.7 Coordination of insurance agents and brokers.- 5.8 Coordination of anneal accounts and consolidated annual accounts.- 5.9 Remaining coordination.- VI Pension Funds.
