The changes likely to occur in the competitive environment as a result of the liberalisation process have become a major issue in the current debate about European integration. Two main channels through which competition will produce its effects can now be clearly identified. The former will provide more opportunities for financial intermediaries to expand geographically, as formally allowed under new rules governing mutual recognition and free business location; the latter will be opened by provisions enhancing capital mobility.

Defining the possible impact of the entire process is, however, a difficult task. Some doubts still remain as to whether the markets can evolve towards forms able to provide greater efficiency in production and resource allocation. The main issues at stake concern financial stability, the way in which it will be affected by liberalisation, and the contribution that regulatory reform can make towards the success of the liberalisation programme.

Historical differences among the various countries may affect the timing within which in practice operating conditions can be aligned. As a result, an asymmetric distribution of costs and opportunities may set in, and the degree of convergence could be quite different across markets and agents. Moreover, the complex pattern of regulatory norms and exceedingly protective practices so far prevailing in many European countries will have to change. There is the fear that the laborious matching process currently under way may result in more or less explicit forms of competitive deregulation.