Monday, 27 June 2011
Vive la France – up to a point
Focus on... financial services
As a lifelong Francophile, my mother would have been proud to witness my participation in the meeting on 9 June of the French Consultative Committee on the Financial Sector (CCSF), which took place in the ‘gilded gallery’ of the Banque de France.
The invitation was to hear CI’s views on the G20 process regarding consumer protection in Financial Services (FS), which has been running through 2011 and is now reaching its public consultation phase. (So expect frequent bombardments by blog in the coming weeks).
As France occupies the presidency of the G20 for 2011, this was an offer we could not refuse. Such echoing splendour can be quite intimidating and it was reassuring to have an important contribution by Anne Fily from BEUC and the presence of our French members.
There was an audience of about 50 participants, many from the financial sector, and a lively discussion followed the presentations. As is often the case on such occasions, one over-prepares and anticipates strong counter-arguments, only to be taken by surprise by the expressed agreement of the industry side.
Several banking representatives indicated their broad agreement with CI’s propositions, and indeed seemed to think that many were self-evident: two intervened to say “On ne peut que etre pour” (One can only be in favour). One member from the labour union (Force Ouvriere) suggested that the committee simply adopt CI’s position as policy. If only G20 governments could be equally enthusiastic.
Despite the agreeable surroundings, we should not be lulled into a sense of overwhelming consensus. My reply was that if the propositions are so self-evident, indeed some of them are quite banal, then why is it such a struggle to get governments and industry to adopt them?
Several of the CI propositions, such as obligation of comparability on banking products are already in place in France, but met with fierce opposition from industry when put forward by Mme Lagarde last year. Not so self-evident 12 months ago then!
In contrast, product prohibition, in the form of a requirement for new products to be preceded by an agrement (approval) by the relevant regulatory authority, the Autorite du Marche Financier, seemed to be widely accepted, (although the ignoble thought crossed my mind that maybe this was because the regulator concerned was in the room).
France matters, not only because it occupies the presidency, but because they are further down the road towards our policy recommendations than many of the other big economies, and the prior authorisation issue is an example of this.
The French government has championed the consumer interest in the G20 process, including Mme Lagarde’s filmed message of support to the Hong Kong World Congress. Not that they agree with everything we say, there is disagreement with our stance on separation of high street banking from investment banking. There is however, agreement that consumer protection is about more than retail transactions at point of sale, it stretches back up the production chain, involving issues such as state aids, prudential regulation.
One argument presented by the French bankers, and being advanced by the industry in other forums (see further blogs), is that consumers must accept responsibility too for their actions in the FS marketplace.
No problem from us on that, we believe that consumers have a responsibility to disclose financial obligations when taking out credit agreements for example. We support the principle of credit reference agencies (although there is debate as to how much data they should collect).
I have yet to meet a serious consumer advocate who does not accept that consumers have responsibilities too, and have witnessed the work of our members to that effect in circumstances as varied as South African townships and eastern Slovak schoolrooms. So, no false opposition of principles please.