Daniele Franco: Business conduct supervision in the financial sector

Introductory remarks by Mr Daniele Franco, Deputy Governor of the Bank of Italy, at the FinCoNet Annual General Meeting, Rome, 13 November 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Good morning, I am happy to open the Annual General Meeting of FinCoNet, which is now an important player in promoting sound financial market conduct.

The protection of financial consumers is now considered essential for a sound financial system. Its importance grew in the aftermath of the global financial crisis. But it is still a challenge to supervisors.

Financial consumer protection was not a supervisory objective until recently. For a long time, it was assumed that an efficient capital market, effective competition among banks, a deposit insurance system, together with prudential supervision and financial market oversight were enough to provide all the protection actually needed.

In the late '70s, the relevance of information asymmetries in financial markets was eventually recognized. This induced a change in perspective and new initiatives at the national level, at the supranational level (such as the OECD Recommendation on consumer protection in consumer credit in 1977), and at the EU level (such as the first EU Directive on consumer credit in 1977).