Internet, standards and the market - an international survey

Since the market for financial services is also becoming increasing more global, differences between regulations and supervisory standards in different countries could create significant barriers. In view of this development, greater importance is now being attached to analytical work and the establishment of standards by various international forums such as Finansinspektionen's (Swedish Financial Supervisory Authority's) international cooperation organizations for bank supervision, insurance supervision and securities supervision, as well as various EU authorities.

Important questions that need answers

• How have international standards been affected by the Internet's growing importance in the market for financial services?
• Will this development place new demands on international and European processes of establishing standards?

It is not possible to easily determine the Internet's importance and effects on the financial services market. All of the questions that arise are different in character, which makes it difficult to gain a total grasp. In order to conduct a meaningful analysis, therefore, it is important to consider the Internet from several different perspectives and focus on different questions. For example, who or which players are affected by Internet applications, where financial services are offered and needed, and how the services are provided.

All of the international cooperation organizations with which Finansinspektionen is affiliated have clearly defined policies for financial services on the Internet.

These policy documents are formulated either as guidelines for supervision, advisory services for corporate management personnel or general statements on policy and positions.

The Internet and trading with financial services represent a critical component in EU's strategy for the inner market's development. This strategy places strong demands on adaptations of standards within a number of different areas.

EU directives are implemented and applied in different ways by its member nations. Differences in national supervisory standards, sanction systems and other financial practices are also creating "barriers." Harmonized regulations, accordingly, do not provide any guarantee that equal conditions will be established in the different countries.

EU authorities are well aware of these problems, particularly the lack of harmonization of regulations in such areas as consumer protection and investor protection. It is considered likely, therefore, that several different solutions will be tested by the EU Commission. Attempts to supplement today's directive-based system with softer methods for establishing new standards will also be reviewed in related areas to provide guidelines for the fulfillment of business objectives, sound business practices and other areas of interest.

Finansinspektionen regards the concept of "technological insight" as a key element in continued and successful efforts to establish uniform standards and regulations. The concept will help us understand, for example, why the Internet is able to create completely new perspectives in some

Read more