MiFID: A Regulatory Doomsday? CEPS Commentaries, 10 January 2007

The EU financial services industry has experienced an enormous regulatory adaptation over the past decade. The dust that had been thrown up by the 1992 programme had barely settled when a new regulatory programme was announced covering 42 measures that had to be implemented by 2005. Exchange rates were fixed in 1998 to prepare the start of monetary union in 1999, followed by the introduction of euro notes and coins a few years later. Accounting standards were changed to IFRS in 2005, the new Basel norms on capital adequacy for banks have to be implemented by the end of 2006, and the MiFID directive regulating capital market activity will be applicable from late 2007 onwards. With almost ever year over the last 10 years having been marked by profound change, it is no wonder that financial markets suffer from regulatory fatigue. Brussels is widely seen as a source of trouble and complaints on the ever increasing cost of compliance are mounting.