This Report tries to assess the consequences for Banking and Insurance in Sweden of entering the EEA (or EU, as it turned out to be). A pervasive concept used in the analysis is that of *market contestability*, linking the conduct and structure of markets to barriers to entry. Changes in contestability caused by changes in the financial regulatory system, asides other driving factors, are presumed to constitute a main source of dynamism in the financial sector. After identifying the essential features of the EU/EEA legal system concerning financial markets, the report identifies the main changes in Sweden's financial regulation occasioned by entering the EU/EEA and the foreseeable consequences for market structure and performance in Banking and Insurance.