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7 February 2000
ACHIEVING EUROPEAN CAPITAL MARKET REFORM
Chief Secretary Andrew Smith today identified three fronts on which EU countries need to make progress on capital market reform. These have been developed from the context of the reform of UK financial services as applicable to building a single European market in financial services, which will be taken forward at Lisbon next month.
Addressing the World Stock Exchanges Conference in London, Mr Smith said:
"European capital markets are already converging and integrating. But there is still much more scope for further innovation, and to extend the benefits of novel financial products and delivery channels to a much wider range of EU consumers.
"We believe that European countries now need to focus their attention on three fronts.
"First, we must set out sights firmly on developing an efficient pan-European capital market by 2003. In particular:
- common accounting standards across the EU will result in cost reductions for firms and allow investors more accurately to compare company results;
- electronic publication and incorporation by reference in prospectuses will make it easier and cheaper for companies to make cross-border securities offers; and
- clarifying the definition of professional, to whom retail consumer protection rules need not apply, will reduce regulatory burdens.
"Second, we must push for completion of a competitive EU retail financial services market to maximise consumer choice;
"Third, we need to take positive action to develop a fully integrated pan-European high risk and venture capital market, removing the remaining obstacles to the creation of a wider and deeper venture capital market by 2003.
"With those reforms, Europe will be ready and able to go beyond its current global standing to move ahead in the new economy of the future. Without them, Europe will find it increasingly difficult even to stand still."
NOTES FOR EDITORS
The full text of Andrew Smith's speech is available on the Treasury website at the link below.
Media enquiries should be addressed to Charles Keseru in the Treasury press office on 0171 270 5188.