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The European Central Bank has criticised the European Commission's proposed directive on payment services in the internal market but it joined the Commission in expressing support for banking industry efforts to realise the vision of the Single Euro Payments Area
In an opinion adopted at the request of the Council of the European Union, the European Central Bank (ECB) welcomed the proposed directive on payment services in the internal market, which was launched by the European Commission in December 2005, as an important initiative to establish a comprehensive legal framework for payment services in the EU. There is currently a wide variety of national legislation related to payments, which makes the implementation of the Single Euro Payments Area (SEPA) difficult.
However, the ECB's opinion identifies some aspects of the proposed directive which it says should be changed to preserve the smooth functioning of the payment system infrastructure. It highlights its concerns regarding the scope of the activities of payment institutions, which is a new concept established by the proposed directive.
Issuing its opinion, the ECB said the "proposed directive is insufficiently clear as to: (i) what kind of activities payment institutions are allowed to perform, and (ii) whether they are allowed to hold balances with similar economic characteristics to deposits or e-money [electronic money] and grant credit financed by money received from the public".
The ECB urged the Council and the European Parliament to ensure that there are adequate safeguards against the risks posed by payment institutions, especially if...