Critics dismiss calls for global financial regulation
Transatlantic regulatory convergence deemed as unrealistic
There has been much talk about the EU and the US co-operating more closely on financial regulation, but in reality transatlantic regulatory convergence remains elusive.
Last week French president Nicholas Sarkozy called for the European Union to work towards creating a global financial regulatory framework to help prevent a repeat of the US subprime crisis. Germany also favours adopting an international approach to financial market regulation, particularly since one of its large banks, SachenLB, became the latest victim to suffer from the fallout of the subprime crisis. “We need an international approach, and the United States needs to be part of it,” said Peter Bofinger, a member of the German economics advisory board.
But UK experts dismiss the idea of a global approach to financial regulation as unrealistic. They say one only has to look at the debacle surrounding the implementation of Basel II, a piece of European legislation, to realise that the markets are different and that the US will not accept European intervention. The implementation of Basel II in the US has been a struggle partly because it has been stigmatised by some as European legislation being imposed on the US. Although US regulators and European supervisors are working together more closely, the reality of global legislation for the financial markets is “pie in the sky”, says one UK economist.
Iain Begg, a visiting professor at the European Institute at the London School of Economics, says an indirect influence on the US, primarily through the Bank for International Settlements, is all Europe can hope for.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Prop shops recoil from EU’s ‘ill-fitting’ capital regime
Large proprietary trading firms complain they are subject to hand-me-down rules originally designed for banks
Revealed: the three EU banks applying for IMA approval
BNP Paribas, Deutsche Bank and Intesa Sanpaolo ask ECB to use internal models for FRTB
FCA presses UK non-banks to put their affairs in order
Greater scrutiny of wind-down plans by regulator could alter capital and liquidity requirements
Industry calls for major rethink of Basel III rules
Isda AGM: Divergence on implementation suggests rules could be flawed, bankers say
Saudi Arabia poised to become clean netting jurisdiction
Isda AGM: Netting regulation awaiting final approvals from regulators
Japanese megabanks shun internal models as FRTB bites
Isda AGM: All in-scope banks opt for standardised approach to market risk; Nomura eyes IMA in 2025
CFTC chair backs easing of G-Sib surcharge in Basel endgame
Isda AGM: Fed’s proposed surcharge changes could hike client clearing cost by 80%
UK investment firms feeling the heat on prudential rules
Signs firms are falling behind FCA’s expectations on wind-down and liquidity risk management