World leaders of the G20 group agreed on the changes at a summit in 2009, but individual countries are only putting the first measures in place now, and have squabbled about how to interpret them. A top issue to be solved this year is how to wind down any large international bank that gets into trouble without using taxpayer money, the statement said. The United States has set up a mechanism to deal with that issue. But Europe's plans for such a troubled bank resolution authority are lagging behind, making it unclear what would happen if a bank collapse affects both jurisdictions.
The US derivatives regulator - the Commodity Futures Trading Commission - in December issued measures requiring foreign banks to comply with US laws when dealing with US clients or when doing business from US offices. There were some exemptions. But the need for foreign banks to comply with the cross-border rules for data reporting, swaps trading, and for clearing trades has upset European regulators, who are seeking greater reliance on their own rules.
Europe is now pushing for financial regulation to be part of US-European trade talks, to create a structure to prevent such disputes. But the US side opposes that plan. "The United States reiterated that financial regulatory cooperation should continue separately in existing global and bilateral fora", the statement said. Treasury Secretary Jack Lew in December defended the strict US stance on regulation, saying he would "press other jurisdictions to match our robust standards" and would not allow trade talks to water down regulation.
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