Building the Financial System of the 21st Century: An Agenda for the EU and U.S.
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Transcript of Building the Financial System of the 21st Century: An Agenda for the EU and U.S.
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Building the Financial System of the 21st Century:
An Agenda forthe EU and U.S.
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Session I
Regulatory Convergence in Transatlantic Capital Markets
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Transatlantic Capital Market:Convergence vs. Divergence
– Why is there Divergence?
– What is Convergence?
– Limits of Convergence
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Why is there Divergence?
– Institutional History· Domestic Economic Crises
– Different Political, Legal and Cultural Systems– Different Local Geography– Different Stages of Economic Development– Protectionism– Regulators’ Turf
· Trust / Distrust of Regulators in other Jurisdictions· Capture
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What is Convergence?
– Free Trade in Capital
– Level Playing Field
– Reduce Costs and Complexity
– Avoidance of Regulatory Arbitrage
– Facilitation of Best Practices
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Limits of Convergence
– One Size Does Not Fit All– Excessive Rigidity– Process Costs of Convergence– Complexity Costs of Convergence
– Is MiFID an Example of too much Convergence?
– Is the Accounting Roadmap an Example of Appropriate Convergence?
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Roadmap for (More?) Convergence
– Industry Initiative – Constructive Proposals
– Regulatory and Legislative Dialogue
– Political Will
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Marketplace ConsolidationNasdaq / LSE
– Who Cares?– What is the Structure of the Operating Model?
(e.g. holding company model or integrated trading)
– What are the Potential Benefits?– What are the Regulatory Constraints?– What are the Political Considerations?– Would Reciprocity – on practical terms – be
Permitted?
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Session II
Current Issues Affecting the Regulation and Operation of the Asset Management
Industry in the EU and the U.S.
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Traditional Asset Management:U.S. – EU Critical Issues
– Developments in the U.S.· Separation of Fund Management and Distribution· Merrill Lynch / BlackRock· What is the Growth Potential of the Asset Management Business?
– Developments in the EU · Strong Growth Potential· Lack of Scale· Regulatory Barriers· UCITS: Single Passport for More Funds – Green Paper
– Transatlantic· Are Hedge Funds Growing too Much?
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Hedge Funds: Should they be Regulated?
– Can We Regulate the “unregulated”?
– Justifications for Regulation·Retail Investor Protection· Systemic Risk
– What Type of Regulation? ·Would Counterparty/ Prime Broker
Regulation be Sufficient?
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Session III
Supervision of Cross-Border Activity of Banks
and Insurance Companies
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Financial Institutions Home – Host Issues
– Role of National Interests· Intra – EU· EU – U.S.
– Basel II·Different Approaches in Different Markets
– Prudential Supervision in Insurance·Risk – Sensitivity in Insurance Regulation·Collateralization as a Trade Barrier