A properly integrated, well-functioning financial market supports the effective and efficient flow of capital within the internal market. It helps the EU economy by encouraging the right investments to be made in the right places, and ultimately it contributes to higher economic growth and employment. Although the single market is in place, financial markets in the Member States still reflect their national origins and, to varying degrees, remain fragmented. Harmonisation of rules, regulations and practices is needed to complete a truly single, EU financial market. The Giovannini Group experts advise on how this can be achieved.

DG ECFIN provides the secretariat for the Giovannini Group. Members of the Directorate-General for the Internal Market and of the European Central Bank (ECB) also participate in the Group's work.

The Group has produced the following reports:

• The impact of the introduction of the euro on capital markets (July 1997)
  This contribution was a major force in forging a common approach to the re-denomination of public debt into euro and in establishing common bond-market conventions for the euro area.
• The EU repo markets: Opportunities for change (October 1999)
  This report highlights the areas that are most clearly in need of reform and offers practical solutions to the problems thrown up by fragmented infrastructures, market practices, and fiscal and legal differences.
• Report on co-ordinated issuance of public debt in the euro area (November 2000)
• Cross-border clearing and settlement arrangements in the European Union (November 2001)
• Second Report on EU Clearing and Settlement (April 2003)

These last two reports have identified a number of barriers hindering the integration of an EU clearing and settlement infrastructure. These barriers can be divided into three main groups:

• National differences in technical requirements and market practice;
• National differences in tax procedures; and
• Issues relating to legal certainty.

A standing group of industry experts and EU officials – the Clearing and Settlement Advisory and Monitoring Expert Group – CESAME – has been established to monitor efforts to eliminate the barriers identified in the report and provide technical input to the Commission’s thinking on matters relating to clearing and settlement.

On the initiative of the Commission, clearing and settlement infrastructure providers have agreed on a European Code of Conduct for enabling greater price transparency and competition.