Will We Get Global Financial Regulatory Coordination?

Back when the Democrats led the charge into a new, aggressive financial regulatory regime last summer, they insisted that the rest of the world would follow the U.S.'s lead. Indeed, they even rushed the bill in an attempt to finish before the G-20 meeting that summer so that U.S. leaders could brag about it begin to persuade other nations to develop similar rules. In fact, some nations in Europe have stricter rules than the U.S. on some issues, like pay. Will nations align their regulation so that the playing field is level?

We should know pretty soon, according to Tom Braithwaite, Brooke Masters and Jeremy Grant at the Financial Times:

A wide range of interviews by the Financial Times with top officials and financial executives on both sides of the Atlantic, many of whom would not speak publicly, convey a common impression that international talks are entering a crucial period that will decide whether new rules of the road will be comparable in London, Frankfurt, Paris and New York.

Or will vested national interests - spurred on by ferocious lobbying from financial groups - bring about an uneven playing field and the return of dangerous "regulatory arbitrage", where operations of multinational financial groups simply base themselves in the location that gives them the easiest time?

The article goes through some of the big issues, including capital, derivatives, and pay. The stakes here are pretty high, as if large financial firms exit one market to escape relatively harsh regulatory treatment, then that nation's economy will suffer a pretty big hit.

Read the full article at the Financial Times.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

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