McCreevy Meets With Kimmitt To Discuss Financial Market Regulation

by Glen Shapiro, LawAndTax-News.com, New York

09 March 2007

EU Internal Market Commissioner, Charlie McCreevy and US Treasury Deputy Secretary Robert Kimmitt met on Wednesday to review the progress made under the US-EU Financial Market Regulatory Dialogue, and to discuss its forward-looking agenda.

Both Commissioner McCreevy and Deputy Secretary Kimmit underlined the importance of the Dialogue’s focus on promoting strong US and EU cooperation on financial markets, fostering convergence, and anchoring financial systems in best global practices. They also agreed to continue their efforts to combat money laundering and the financing of terrorism

Deputy Secretary Kimmitt observed that the EU had made great progress in putting in place the framework for an integrated EU wholesale market, and took note of the similar efforts being made on the retail side.

Commissioner McCreevy thanked the US Treasury for its leadership of the Dialogue, and commended the United States for working closely with the European Commission in addressing many issues of European concern.

Commissioner McCreevy welcomed the principles and guidelines regarding private pools of capital recently issued by the President’s Working Group on Financial Markets.

"We must also cooperate with other leading jurisdictions to ensure that the global dimension of these businesses are properly taken into account. In that respect, I very much welcome recognition of the need for international supervisory cooperation in the U.S. initiative" he announced.

Both Commissioner McCreevy and Deputy Secretary Kimmit welcomed Chancellor Merkel’s proposal to launch a Transatlantic Economic Partnership at the US-EU Summit, and pledged to continue working toward that goal through the informal and cooperative structure of the Dialogue.

Delivering a speech on transatlantic cooperation in financial services to the US Chamber of Commerce the previous day, Commission McCreevy observed that:

"Regulation of course is essential. Without it there would be no confidence in a capital market. Without confidence there would be no investment and without investment there would not be a market. So we need regulation: good, slim-line, principles-based regulation. Prescriptive, rules-based, heavy-handed regulation has no place in a market economy. Candidly, we must, where we can, get rid of it. It slows strong businesses down. It drives struggling businesses under. It locks new businesses out. And therefore it serves neither investors, shareholders, nor consumers well."

He continued:

"The debate now taking place is timely. It is good news for you in the US and for us in the EU. Good news too for other partners around the world. Economic integration between our economies runs deep – nowhere deeper than in financial markets. That’s why the spillover effects of regulation between us are significant."

"Most of our major publicly quoted companies – on both sides of the Atlantic - are affected by US and EU rules. So the more we can do to move forward together, to bring our rules closer, to achieve more convergence AND more openness, the deeper and more liquid our capital markets will become, the lower our cost of capital will become, the less the cost of regulatory compliance will become, and the more businesses, investors and consumers will benefit."

"Of course there are some strong vested commercial and professional interests who promote duplication, complexity and waste. But the overall economic good demands that we work to defeat those interests."

"What we need is a modern, open and reliable regulatory framework on both sides of the Atlantic."

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