You're listening to European Parliamentary Research Service podcast on third country access to the single marketing financial services.

If a German or a Swedish bank wants to offer its services in another member state of the European Economic Area or EEA, they can use their single passport rights to do so

without additional red tape. But what happens with financial institutions coming from third

countries is equivalence, the Open Sesame Formula to grant them access to single market in financial

services. Stay with us.

Since the financial crisis, the EU has worked hard to stabilise and reform financial markets,

filling in regulatory gaps and tightening financial supervision to ensure it won't happen again.

The financial crisis also contributed to reshaping the EU's regulatory approach to relations with third country entities,

granting them increasing access to the single market in financial services on the basis of equivalence.

Now, what does this word mean?

Well, equivalence is a legal concept that has emerged over the past 30 years to facilitate cross-border trading between markets that choose to recognise one another's standards.

The EU has adopted this concept in many of the recent Financial Services Act

to define the terms of access to its market.

Basically, third country financial entities coming from jurisdiction

considered to have equivalent regulatory provisions are allowed to offer their services in the EU.

Some experts believe this acts as an incentive for third countries

to push their domestic rules up to the EU standards,

as non-equivalence increases the costs for companies wanting to provide services in Europe.

Others, however, believe foreign service providers can always find ways to adapt.

But how is equivalence determined and who decides on it?

Well, technical assessments of equivalents are carried out by financial experts in the European

Commission who verify whether third country legal frameworks are equivalent to EU rules or not,

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