Banking and Currency (Hansard, 27 November 1989)

§ Mr. Ryder

The Government are fully committed to the European single market after 1992. Financial services legislation will form a major part of the measures introduced to secure the single market and many of these have already been agreed or are under active consideration. In the banking field, the Council agreed a common position text for the second banking co-ordination directive and the associated solvency ratios directive in July. These directives, together with the own funds directive, which was formally adopted in April 1989, make up a package of measures which are intended to secure a single market in banking. Briefly, these measures will provide credit institutions (largely banks and building societies in the United Kingdom) which are authorised in one member state with a "passport" to offer banking services throughout the Community without the need of further authorisation. Further information can be obtained from the DTI booklet "The Single Market: Financial Services" published in September 1989, copies of which are available in the Library of the House.

The Council adopted the capital liberalisation directive on 24 June 1988 which provides for the free movement of capital across the Community. Remaining exchange controls in most member states are due to be abolished from 1 July 1990; but Spain, Ireland, Greece and Portugal have until the end of 1992 to comply with all its terms (with the possibility of a further extension for three years in Greece and Portugal). The Government strongly support the removal of exchange controls in the community: this is essential for the development of a single market. The United Kingdom abolished all exchange controls in 1979.

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The United Kingdom's response to the Delors report "An Evolutionary Approach to Economic and Monetary Union", also proposes lifting further restrictions on the use of Community currencies and removing barriers to the use of cheaper and more efficient means of payment.