The liberalisation of banking and insurance in the EEC in the 1980s
The purpose of this present study is to identify and evaluate obstacles in the way of liberalising banking and insurance services in the EC area. Two countries are used as cases for this purpose: the UK and Greece. The UK cases represent the barriers to freedom of financial services in the developed EC countries while the Greek cases represent those of the developing EC countries. The distinction between developed and developing countries is considered as necessary since the rationales that exist for erecting barriers to freedom of financial services seem to vary according to the level of development. In the developed countries protectionist measures are imposed to safeguard the interests of the consumers, while in the developing countries the placing of strict barriers to trade in international financial services is used mainly as support for protection of the domestic financial sector and financial protectionism. In the UK case studies barriers in the way of liberalising banking and insurance services are identified and evaluated in the light of the divergence of supervisory philosophies and practices between the UK and the continental European countries. The UK authorities have adopted a flexible supervisory system which is considered by the other European countries as one that moves in a direction inconsistent with the objective of preserving the integrity of the financial system. In the Greek case studies the analysis suggests that the unification of the European financial sectors would have detrimental effects not only on the domestic financial sector but also on the whole economy. The authorities would find it very difficult to accept a measure which would bring about complete freedom of competition, particularly within the timescale set by the EC Commission - ie the end of 1992.