Transatlantic Cooperation for Post-Crisis Financial Reform: To What End? (April 2011)

Rethinking Bretton Woods | Fri, Apr 15, 2011

By Aldo Caliari

A paper co-published by the Heinrich Boell Foundation and Center of Concern explores the key issues in the emerging financial regulatory reform agenda and the impacts of transatlantic cooperation by governments and by civil society.

Executive Summary
During the 2008-09 financial crisis, the Group of 20 (G-20) began to meet at the “Heads of State” level to formulate and implement emergency policy responses, on the one hand, and build consensus on the longer-term reforms required in the international financial system, on the other. Since then, the US and the European Union have been overhauling their own financial regulatory frameworks in parallel processes as well as working on regulatory frameworks in the context of G20 meetings where representatives of the US and five European governments and the EU hold seats.
This study examines the question: What are the key issues regarding financial regulation on which transatlantic cooperation (or lack of it) could have an impact?
Section I, which represents the heart of the paper, addresses this question and, in analyzing those key issues, also provides insights on the out-sized influence of the financial industry’s lobby on both sides of the Atlantic. However, areas are also identified where the advocacy agendas of parliaments and civil societies (in areas such as social justice, the environment, consumer affairs) are holding sway even in the face of this lobby.
Section II focuses on two areas that receive less attention in connection to debates about reform, despite their significant implications on the effectiveness of transatlantic financial regulatory efforts. These are: liberalization of financial services and the shadow banking system.
Section III identifies the key venues for transatlantic cooperation on international financial regulation.
Section IV focuses on the role of civil society in transatlantic cooperation processes and offers ideas on how to maximize, broaden and qualify their influence on such processes. Section V offers closing remarks and conclusions.
The paper also examines, in an annex, connections between the financial regulatory agenda and the search for solutions to the global imbalances that, arguably, played an important role as a trigger of the financial crisis. This annex helps respond the question of how an understanding of these connections might inform transatlantic cooperation.
Click here for full paper. 

PDF icon PostCrisisRef.pdf1.56 MB