BRUSSELS, Dec. 13 (Xinhua) -- Integration of financial markets across the European Union (EU) remained uneven though progress was made, the European Commission said in a report on Thursday.

    After years of endeavor, the EU financial integration has progressed but the speed and scope has not been the same across all market segments, the report said.

    Problems mainly existed with retail financial markets, where the lack of integration was reflected in wide price variations across member states and low volume of direct cross-border transactions, according to the commission's annual assessment.

    For the wholesale segment, specifically equity markets, further efforts were also needed to integrate securities clearing and settlement systems.

    "Our financial services sector is still characterized by an uneven level of integration of wholesale and retail financial markets. While integration of capital markets has progressed significantly in recent years, in retail financial services it has not yet reached its potential," said EU Internal Market and Services Commissioner Charlie McCreevy.

    On the positive side, the report found that European financial integration has changed market structures, due in part to merger and acquisition activities. The continued consolidation process has resulted in rising concentration ratios in many markets.

    The progress of financial integration has also multiplied the market links between member states and across financial sectors, which would have potential effects on financial stability.

    Meanwhile, financial innovation has been progressing quickly, resulting in new products and practices, the report said.