Michel Tison

Financial Market Integration in the post-FSAP era

WP 2006-09

This paper looks into the concepts underpinning the current generation of capital market integration directives, that follow the "Lamfalussy-approach" . In particular, we examine whether the Level 1-directives are based on minimum or maximum harmonization. We submit that the European lawmakers have failed to clarify this issue, thereby reducing legal certainty for the various stakeholders(suppliers, investors and supervisors alike). In addition, the adoption of yet a new harmonisation technique runs the risk of creating inconsistencies with the previous generation of financial marketintegration directives, adopted under the 1992 Internal market program. Finally, we look at how the Prospectus Directive and MiFID divide regulatory and supervisory powers between home and hoststate.