Financial services regulation and the Transatlantic Trade and Investment Partnership agreement

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 for...