Onshore 2 Offshore

* European Financial Integration Report 2007







The European Commission released its European Financial Integration Report (EFIR) in December, an annual analysis of integration of the EU financial services sector. EFIR monitors European financial integration and merged two former reports (the Financial Integration Monitor and the Single Market in Financial Services Progress Report).

The report indicates that the speed and scope of financial integration has not been the same across all market segments. For the wholesale segment, further integration will depend on the progress in integrating securities clearing and settlement systems. As for retail markets, the lack of integration is reflected in wide price variations acrossmember states and the low volume of direct cross-border transactions.

European financial integration has changed market structures, due in part to merger and acquisition activities. The continued consolidation has resulted in rising concentration ratios in many markets. The report also tackles competition and the available evidence suggests that consumers and SMEs would benefit from stronger competition at EU level. Favourable economic conditions recently improved the efficiency indicators of EU financial institutions and markets. The report also shows that there is still significant potential for improvement as fragmentation or relative underdevelopment prevents economies of scale and scope from materialising in a number of markets. The progress of financial integration has multiplied the market links between member states and across financial sectors.