January 23, 2014
Brummer On How To Improve The Transatlantic Banking Relationship
Posted by David Zaring

Chris Brummer has a column over at Project Syndicate with some proposals for improving an increasingly frayed relationship.  You'll have to head over there for the prescriptions, but here's his encapsulation of the problem:

Radical disparities between the rule-making cultures of the US and the EU are exacerbating the problem. Unlike the US, where independent agencies lead the rule-making process according to Congressional dictates, legislative actors in Brussels and Strasbourg – the European Commission, the European Council, and the European Parliament – set regulatory agendas and write the rules. And, though EU agencies like the European Central Bank are assuming an increasing share of regulatory responsibility, divergences in decision-making procedures continue to affect the rate and nature of transatlantic coordination.

Making matters worse, market and monetary reforms have occasionally merged, with rule-making becoming partly dependent on the decisions of disparate agencies and institutions. Meeting enhanced Basel III capital standards, for example, is about more than just rules; it requires the recapitalization of banks – a process that is taking longer in Europe than in the US, partly because the eurozone has had to negotiate funding mechanisms for banks and cash-strapped governments. Now these delays are raising doubts in the US about the EU’s commitment to reform.

Well worth your time, if you think that this sort of regulatory diplomacy is an increasing feature of financial supervision....

Administrative Law, Finance, Financial Institutions | Bookmark

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