ABSTRACT
Consumer protection rules that ensure creditors better assess consumers should lead to less cross-subsidisation if creditors are better able to assess the risk of particular consumers. Maximum harmonisation was seen as a tool to achieve greater cross-border trade. But, it is unlikely to be very effective, given the other factors pulling consumers towards local creditors. The loss of local flexibility caused by adopting maximum harmonisation does not seem justified with a product like consumer credit, and even more so mortgages, as there are a lot of factors encouraging consumers to purchase in familiar national markets. The mortgage market is even more distinctly national in character than the general consumer credit market and has a very limited internal market dimension. National traditions vary greatly as regards the financing of home ownership and natural human conservatism intensifies the propensity to prefer products from the national market.
