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Current financial crisis starting in U.S. makes us reexamine the global financial system including U.S and Europe. Since launching community currency system, European Community moved to abolish financial regulations and push forward free market principle. But, this financial crisis
raises questions on this principle and actions. 'Free Movement,' a principle of European financial system has been driven by 'Single Passport' system, which has resulted in EC Treaty, and various 'Regulation,' 'Directive' and 'Decision' as secondary legal sources. 'Directive' is an important legislation tool, and it accepts individual characteristics of member countries and consolidates the entire market. In addition, it establishes a regulatory system for financial service market including bank, security, insurance, as well as provides protective regulations to investors. European Central Bank cannot take a direct control of financial market, but it is involved in direct supervision by using 'Opinion,' and 'Recommendation.' In Europe, 'EU-Council' and 'EU-Commission' are two financial supervisory organizations, and 'EU Commission' commands different regulatory and advisory units for major market segments including bank, securities, insurance and pension. Those regulatory and advisory units are engaged with two and three phases of Lamfalussy process Amid current financial crisis, some experts argue that EU needs to give more power to the European Central Bank such as a function of lender of last resort. Further they argue that EU should put more regulations on
high-risk financial products including financial derivatives. The voice appear to confront disagreement from EU members, but in a larger perspective, they surely move forward to re-establish a stronger regulatory system.