Online financial services in the European internal market and the implementation of the e-commerce directive in the UK

Abstract

In free trade areas that consist of several sovereign Member States, legal restrictions in the provision of cross-border banking and financial services are caused by the divergent or conflicting norms (either public or private law), which apply in the constituent national markets. The solution to the restrictive effects of the conflict of laws is either extensive harmonization or perhaps uniform law or trade liberalization on the basis of mutual recognition and ‘country of origin’ regulation. In the case of the European internal market for banking services a hybrid solution has been achieved. After outlining the current hybrid EC framework, I will examine the contribution of the E-Commerce Directive to a better functioning single European market for cross-border Internet banking. I will also present the implementation of the ‘country of origin’ rule in the UK and its likely impact on cross-border electronic banking services.