Advertisement

Journal of Transatlantic Studies

, Volume 14, Issue 1, pp 1–25 | Cite as

Financial services regulation and the Transatlantic Trade and Investment Partnership agreement

  • Laurie BuonannoEmail author
Article

Abstract

Together, the EU and the USA dominate the global financial services industry. This dominance, coupled with the inherent risk of regulatory arbitrage, suggest that the financial services sector is an area ripe for transatlantic economic and regulatory cooperation. While historically transatlantic dialogue centred on market liberalisation, after the 2008 global financial meltdown the focus shifted to regulatory reform. The EU sees the Transatlantic Trade and Investment Partnership as an opportunity to establish a transatlantic financial services regulatory council, while the USA opposes a shift from the current informal Financial Markets Regulatory Dialogue (FMRD). An analysis of post-2010 regulatory reforms finds that regulatory convergence has taken place without a tightly integrated transatlantic regulatory body. The study concludes that differences in political ideology, institutional structures, and regulatory capacity largely explain disagreement between the EU and the USA as to the most effective form transatlantic regulatory cooperation should take in the financial services sector.

Keywords

transatlantic cooperation financial services regulation Transatlantic Trade and nvestment Partnership international governance preferential trade agreements 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Notes

  1. 1.
    Joseph Francois et al., Reducing Transatlantic Barriers to Trade and Investment: An Economic Assessment (London: Centre for Economic Policy Research, 2013).Google Scholar
  2. 2.
    European Commission, ‘Transatlantic Trade and Investment: An Economic Analysis’, 2013.Google Scholar
  3. 3.
    Transatlantic Business Dialogue, TABD Position Paper: Financial Market Integration (Brussels: Transatlantic Business Dialogue, 2012) and Transatlantic Business Dialogue, ‘EU-US Financial Markets - Need for Cooperation in Difficult Times’, 2010.Google Scholar
  4. 4.
    Anthony Gardner, ‘EU Pushes Financial Regulation in US Trade Talks’, European Voice, January 28, 2014; Vieuws, ‘“Financial Services Should Be Included in TTIP Negotiations,” Argues European Commission’, November 12, 2013Google Scholar
  5. 4a.
    European Commission, ‘EU-US Transatlantic Trade and Investment Partnership: Cooperation on Financial Services Regulation’, January 27, 2014.Google Scholar
  6. 5.
    Vieuws, ‘US Ambassador Anthony L. Gardner to Debunk the TTIP Myths’, May 12, 2014Google Scholar
  7. 5a.
    Ken Monahan and Christpher Payne, ‘US-EU Trade Talks: Why Financial Regulation Is Proving a Hard Nut to Crack’, Bloomberg Government, February 20, 2014.Google Scholar
  8. 6.
    David Marsh, ‘The Development of the Policy Network Approach’, in Comparing Policy Networks, ed. David Marsh (Buckingham: Open University Press, 1998), 8.Google Scholar
  9. 7.
    Tanja A. Börzel, ‘Organizing Babylon - On the Different Conceptions of Policy Networks’, Public Administration, 76, no. 2 (1998), 253–273, 264.CrossRefGoogle Scholar
  10. 8.
    Hugh Heclo, ‘Issue Networks and the Executive Establishment’, in The New American Political System, ed. Anthony King (Washington, DC: American Enterprise Institute, 1978).Google Scholar
  11. 9.
    David Marsh and R.A.W Rhodes, ‘Policy Communities and Issue Networks: Beyond Typology’, in Policy Networks in British Government, eds. D. Marsh and R.A.W. Rhodes (Oxford: Clarendon Press, 1992).CrossRefGoogle Scholar
  12. 10.
    Börzel, ‘Organizing Babylon’, 254.Google Scholar
  13. 11.
    Marsh and Rhodes, Policy Networks in British Government.Google Scholar
  14. 12.
    Mark Pollack and Gregory Schaffer, ‘Transatlantic Governance in the Historical and Theoretical Perspective’, in Transatlantic Governance in the Global Economy, eds. M. Pollack and G. Schaffer (Latham, MD: Rowman & Littlefield, 2001).Google Scholar
  15. 13.
    Anne-Marie Slaughter, New World Order (Princeton, NJ: Princeton University Press, 2005), 24.Google Scholar
  16. 14.
    Anne-Marie Slaughter, ‘The Real New World Order’, Foreign Affairs, September/October 1997, 183–197, 194.Google Scholar
  17. 15.
    Pollack and Schaffer, Transatlantic Governance in the Global Economy.Google Scholar
  18. 16.
    Gretchen Morgenson, ‘Barriers to Change, from Wall St. and Geneva’, The New York Times, March 17, 2012.Google Scholar
  19. 17.
    Bela Balassa, The Theory of Economic Integration (London: Allen & Unwin, 1962) andGoogle Scholar
  20. 17a.
    Jacques Pelkmans, Dominik Hanf, and Michele Chang, eds., Internal Market in Comparative Perspective: Economic, Political and Legal Analyses (Brussels: Peter Lang, 2008).CrossRefGoogle Scholar
  21. 18.
    Laurie Buonanno and Neill Nugent, Policies and Policy Processes of the European Union (Basingstoke: Palgrave Macmillan, 2013).CrossRefGoogle Scholar
  22. 19.
    Nikolaos Zahariadis, ‘Transatlantic Competition Policy’, in The New and Changing Transatlanticism: Politics and Policy Perspectives, eds. Laurie Buonanno, Natalia Cuglesan, and Keith Henderson (New York: Routledge, 2015).Google Scholar
  23. 20.
    European Commission, ‘EU-US Transatlantic Trade and Investment Partnership: Cooperation on Financial Services Regulation’, January 27, 2014, 1.Google Scholar
  24. 21.
    Monahan and Payne, ‘US-EU Trade Talks’, 5.Google Scholar
  25. 22.
  26. 23.
    EU-US Financial Markets Regulatory Dialogue, ‘Financial Markets Regulatory Dialogue - Joint Statement’, January 30, 2014.Google Scholar
  27. 24.
    US Senator Pat Roberts, Letter Signed by 45 U.S. Senators to Tom Vilsack, Secretary, US Department of Agriculture and Michael Froman, USTR, April 4 Opposing Geographical Indication Restrictions Promoted by the European Union Through the TTIP (Washington, DC, 2014).Google Scholar
  28. 25.
    US-South Korea, ‘US-Korea Free Trade Agreement’, https://doi.org/www.ustr.gov/trade-agreements/free-trade-agreements/korus-fta/final-text.
  29. 26.
    EU and South Korea, ‘Free Trade Agreement Between the European Union and Its Member States, of the One Part, and the Republic of Korea, of the Other Part’, 2011, https://doi.org/eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2011:127:FULL&from=EN
  30. 27.
    EU and Canada, ‘Consolidated CETAText’, 2014, https://doi.org/trade.ec.europa.eu/doclib/docs/2014/september/tradoc_152806.pdf
  31. 28.
    European Parliament, ‘Transatlantic Trade and Investment Partnership Debate, Commission Briefing’, July 15, 2014, https://doi.org/www.europarl.europa.eu/ep-live/en/plenary/video?debate=1405436531874.Google Scholar
  32. 29.
    Jason Manolopoulos, Greece’s ‘Odious’ Debt: The Looting of the Hellenic Republic by the Euro, the Political Elite and the Investment Community (New York: Anthem Press, 2011).Google Scholar
  33. 30.
    Tanja Boskovic, Caroline Cerruti, and Michel Noel, World Bank Working Papers: Comparison Between the European and United States Securities Regulations: MiFID Versus Corresponding U.S. Regulations (Herndon, VA: World Bank Publications, 2009).CrossRefGoogle Scholar
  34. 31.
    de Larosière Group, ‘The High-level Group on Financial Supervision in the EU’, 2009.Google Scholar
  35. 32.
    US Department of Treasury, ‘Blueprint for a Modernized Financial Regulatory Structure’, 2008.Google Scholar
  36. 33.
    European Council - The President, ‘Towards a Genuine Economic and Monetary Union’, 2012.Google Scholar
  37. 34.
    European Commission, ‘Regulation No. 1092/2010 of the European Parliament and the Council on European Union Macro-Prudential Oversight of the Financial System and Establishing a European Systemic Risk Board’, 2010.Google Scholar
  38. 35.
    European Central Bank, ‘Banking Supervision’, https://doi.org/www.ecb.europa.eu/ssm/html/index.en.html (accessed January 27, 2014).
  39. 36.
    European Banking Authority, ‘Results of the 2014 EU-Wide Stress Test’, 2014.Google Scholar
  40. 37.
    Ian Wishart, ‘Deal Reached on Markets Legislation’, European Voice, June 17, 2013.Google Scholar
  41. 38.
    Benjamin Fox, ‘EU Lawmakers Agree Deal on Commodity Trading’, Euobserver, January 15, 2014.Google Scholar
  42. 39.
    Nicholas Hirst, ‘Commission Proposes Ban on Proprietary Trading’, European Voice, January 30, 2014.Google Scholar
  43. 40.
    Edward V. Murphy, CRS Report for Congress: Who Regulates Whom and How? An Overview of U.S. Financial Regulatory Policy for Banking and Securities Markets R43087 (Washington, DC: Congressional Research Service, 2013), 28.Google Scholar
  44. 41.
    Edward V. Murphy, ‘CRS Report for Congress: Who Regulates Whom and How? An Overview of U.S. Financial Regulatory Policy for Banking and Securities Markets R43087’, iii.Google Scholar
  45. 42.
    The New York Times, ‘Volcker Rule Approved by Regulators’, The New York Times, December 10, 2013; Cheyenne Hopkins and Ian Katz, ‘Regulators Consider Easing Volcker Trading Rules’, BloombergBusiness.com, https://doi.org/www.bloomberg.com/news/2014-11-07/regulators-consider-easing-volcker-trading-rules.html (accessed November 7, 2014).
  46. 43.
    Financial Industry Regulatory Authority, About Finra’, 2013, https://doi.org/www.finra.org/AboutFINRA/.
  47. 44.
    PriceWaterhouseCoopers, ‘Understanding the Dodd-Frank Act’, 2010, https://doi.org/www.pwc.com/us/en/view/issue-13/understanding-the-dodd-frank-act.jhtml.
  48. 45.
    European Securities and Markets Authority, ‘Speech by Verena Ross, Liquidity and New Financial Market Regulation Esma/2014/224’, 2014.Google Scholar
  49. 46.
    European Commission, ‘EU-US Transatlantic Trade and Investment Partnership: Cooperation on Financial Services Regulation’, January 27, 2014.Google Scholar
  50. 47.
    EU-US Financial Markets Regulatory Dialogue, ‘Financial Markets Regulatory Dialogue - Joint Statement’, January 30, 2014.Google Scholar
  51. 48.
    Steven Lofchie, US and EU Hold Financial Markets Regulatory Dialogue (New York: Center for Financial Stability, 2014).Google Scholar
  52. 49.
    US Department of Treasury, ‘US-EU Financial Markets Regulatory Dialogue Joint Statement’, September 23, 2015.Google Scholar
  53. 50.
    Monahan and Payne, ’US-EU Trade Talks, 7.Google Scholar
  54. 51.
    Bank for International Settlements, ‘About the Basel Committee’, 2013, https://doi.org/www.bis.org/bcbs/about.htm.
  55. 52.
    Financial Stability Board, ‘Mandate’, 2013, https://doi.org/www.financialstabilityboard.org/about/mandate.htm.
  56. 53.
    European Commission, ‘A Comprehensive EU Response to the Financial Crisis: Substantial Progress Towards a Strong Financial Framework for Europe and a Banking Union for the Eurozone Memo/14/244 28/03/2014’, 2014.Google Scholar
  57. 54.
    Monahan and Payne, ‘US-EU Trade Talks’, 6.Google Scholar
  58. 55.
    Danny Hakim, ‘US Trade Officials Try to Curb Europe’s Expectations’, The New York Times, September 12, 2013.Google Scholar
  59. 56.
    Karel Lannoo, ‘Financial Services and the Transatlantic Trade and Investment Partnership’, CEPS Policy Brief, no. 302, 2013.Google Scholar
  60. 57.
    Peter Eavis, ‘Wall St. Wins a Round in a Dodd-Frank Fight’, The New York Times, https://doi.org/dealbook.nytimes.com/2014/12/12/wall-st-wins-a-round-in-a-dodd-frank-fight/ (accessed December 12, 2014)Google Scholar
  61. 57a.
    Paul Krugman, ‘Wall Street’s Revenge: Dodd-Frank Damaged in the Budget Bill’, The New York Times, https://doi.org/www.nytimes.com/2014/12/15/opinion/paul-krugman-dodd-frank-damaged-by-the-budget-bill.html (accessed December 14, 2014).Google Scholar
  62. 58.
    Monahan and Payne, ‘US-EU Trade Talks’, 6.Google Scholar
  63. 59.
    European Commission, ‘EU-US Transatlantic Trade and Investment Partnership: Cooperation on Financial Services Regulation’, January 27, 2014, 4.Google Scholar
  64. 60.
    EurActiv, ‘TTIP Will Not Include Financial Services, Says Ambassador: Interview with Euractiv’, EurActiv, July 16, 2014.Google Scholar
  65. 61.
    Buonanno and Nugent, Policies and Policy Processes of the European Union, 222-223; 322–324.Google Scholar
  66. 62.
    EEAS, ‘EEAS Review’, 2013.Google Scholar
  67. 63.
    Giandomenico Majone, ‘The Rise of the Regulatory State in Europe’, West European Politics, 17, no. 3 (1994), 77–101.CrossRefGoogle Scholar
  68. 64.
    Lannoo, ‘Financial Services and the Transatlantic Trade and Investment Partnership’, 2013, 2.Google Scholar
  69. 65.
    Xavier Rolet, ‘Unleash the Power of Equity Finance’, Financial Times, July 10, 2012.Google Scholar
  70. 66.
    Buonanno and Nugent, Policies and Policy Processes of the European Union, 69.Google Scholar
  71. 67.
    Mark Baimbridge and Philip Whyman, Britain, the Euro and Beyond (Abingdon: Ashgate Publishing Group, 2008).Google Scholar

Copyright information

© Board of Transatlantic Studies 2015

Authors and Affiliations

  1. 1.Department of Political ScienceSUNY Buffalo StateBuffaloUSA

Personalised recommendations