If the element of national thinking in financial investments were reduced, more savers would also be able to benefit from a broader supply of products. At the same time, it is essential that increased financial exposures towards companies and financial operators in other countries occur in controlled forms, i.e. with a high degree of transparency with regard to the risks attached to them. This is particularly important with regard to financial commitments of normally very long duration, e.g. investments in connection with life insurance. There is reason to believe that the demand for financial services will continue to be a driving force behind the integration process and give a basis for further structural changes in the financial markets. Increased corporate financing through securities is one trend that will undoubtedly be further reinforced. Similarly, households’ saving in funds will probably show a rapid increase in the future, particularly in order to secure future pensions, and this will call for a capacity to diversify investments, where geographical spread in particular is an important aspect. In these two latter aspects, however, Europe is a long way behind the United States. One obvious difference between the US and Europe is that the banking system plays a much bigger role here. This 1  Heinemann, F & M Jopp (2002): The Benefits of a Working European Retail Market for Financial Services, Report to the European Financial Services Round Table. 2  idem.
has largely historical reasons, but it also has importance for the continued structural development of the financial system, since it has proved to be much more difficult to integrate financial institutions than financial markets. The most obvious trend in the banking system in Europe is the consolidation within individual countries into larger units. On the other hand, very few banks have established themselves in other countries, and the - relatively modest - consolidation that has occurred through cross-border mergers and acquisitions has not in general led to any radical change in the market within the EU for the services traditionally offered by the banks to households and small companies. Within this area of the banking sector there is still a substantial over-capacity in the EU, which seems to be taking some time to phase out. However, a number of banks in western Europe have expanded into eastern Europe and contributed to a modernisation of the banking systems in the former planned economies. Internationalisation is a driving force My point thus far is that most of the driving forces behind the developments in the financial sector are connected with increased international competition and an increased awareness of international opportunities, and that regulatory systems are also becoming more international. Within the legal community constituted by the EU, the financial legislation applies to all 15 member states, and the financial services action plan that is now on the agenda for implementation by 2005 will also affect the conditions for the operations of the financial sector in Sweden.