The purpose of this article is to analyse the interconnection between the regulation of the financial market and the principles of freedom of establishment and freedom of capital movement. Namely the author would like to verify, if the above mentioned principles have the potential to limit the EU legislator in the way that he is trying to regulate the financial sector. This question is fairly important, as protectionist phenomena are increasingly visible in the EU especially in times of crises like pandemic or war in Ukraine.
The existence of freedom of establishment and freedom of capital movement have without any doubts positive impact on the development of internal market as it protects cross-border investors from excessive national regulation. But that author would like to underline that on the other hand, it constitutes quite a regulatory challenge for the legislator who wants to introduce certain restrictions or certain higher level of supervision on the financial market.
As a consequence, it can be stated that the freedoms that characterize the EU internal market are an additional reason for the existence of the so-called incomplete law on the financial markets, because this specific sector cannot be fully regulated both at national and supranational level. In this context, this article may be an impulse to initiate a discussion on the reactivity of the national and European legislator in times of financial crises and on the effectiveness of financial market regulation.