The EU-wide Markets in Financial Instruments Directive will have its winners and losers, but Britain remains well-placed to take advantage of the new cross-border opportunities it offers, says Michael McKee, BBA Executive Director for Wholesale Banking:

"This week sees the culmination of many years of very hard bargaining by virtually everyone who has ever taken an interest in financial services. The major European financial firms have already spent some years and millions of pounds preparing for this change, but as with all change there are likely to be some winners and losers. London is the world's financial capital - its concentration of expertise, experience and financial acumen put it in pole position to reap the benefits of this harmonisation in the future."

The Directive which comes into force on 1 November 2007 aims to break down borders and to harmonise financial services across the EU. The BBA predicts that:

• large banks and exchanges are best placed to benefit for the coming changes. Many of them have followed the negotiations closely and have well-developed project teams in place. The bigger the bank, the lower proportionately are the implementation costs;
• smaller banks will reap the best benefit from MiFID by using it to differentiate their service offerings from their competitors. Private banks will however be pressed to combine the new regulatory requirements with their traditionally bespoke services to clients; and
• smaller financial institutions, particularly non-banks, will be less well-placed to derive any significant benefits from MiFID: the high implementation costs needed to maximise their opportunities may exclude them from changes for the moment.