DJ ECB: EU Payment Systems Directive Requires Amendment
(Comtex Business Via Thomson Dialog NewsEdge)FRANKFURT, Apr 28, 2006 (Dow Jones Commodities News via Comtex) --The European Central Bank said Friday that the European Union payment systems directive requires some amendments to avoid "diverging interpretations."
The directive is aimed at providing a legal framework for payment services within the single market, which has long been a sore spot, particularly following the introduction of the single currency.
The ECB said it will publish an opinion in the Official Journal of the European Union shortly, but urged the E.U. to make "explicitly clear that payment institutions may not use customers' funds during the limited time period that the funds are being transferred from the payer to the payee."
In addition, the ECB said it had numerous concerns about the scope of activities of payment institutions.
"In this respect, the proposed directive is insufficiently clear as to (i) what kind of activities payment institutions are allowed to perform and (ii) whether they are allowed to hold balances with similar economic characteristics to deposits or e-money and grant credit financed by money received from the public," the ECB said.
Banks are likely to favor such an amendment, since competition from institutions providing similar services without equal regulatory strictures would be unwelcome.
The ECB said that if the introduction of the directive were delayed, this could endanger the Single Euro Payment Area, which is planned for completion by 2010.
Therefore, rather than wait for the outcome of any prolonged negotiations, the E.U. should consider splitting the directive, "giving priority to adopting the parts necessary for a successful implementation of the SEPA," the ECB said.
SEPA is aimed at providing integrated banking and payment services for the single currency area, breaking down cross-border barriers.
-By Monica Houston-Waesch; Dow Jones Newswires; +49 69 29 725 520; [email protected]
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