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July 9, 2014
Region:
The transatlantic integration of financial markets has suffered a serious setback since the crisis of 2007. Since then, the countries affected have fundamentally overhauled the regulatory framework governing financial markets. However, this stricter regulation has led to regulatory divergence: Divergent rules on capital, liquidity, derivatives and banking structures are threatening to fragment the financial markets. Slightly divergent national policy preferences, the institutional framework and the relevant partners' differing ideas on reform have been the main factors driving this unfortunate trend. The proposed Transatlantic Trade and Investment Partnership (TTIP) provides a good opportunity to lay strong institutional foundations for regulatory cooperation on financial services as well. Responsibility for creating internationally harmonised rules on financial market regulation rests with the G20 leaders. [more]