Skip to main content
Disciplines
Automotive Business IT + Informatics Construction + Real Estate Electrical Engineering + Electronics Energy + Sustainability Insurance + Risk Finance + Banking Management + Leadership Marketing + Sales Mechanical Engineering + Materials
Events
DE
EN
Books
Journals
Topic Page
Marketing
Start single access now
Access for companies
EXTENDED SEARCH
Log in
Top
Published in:
Introduction: Institutionalisation beyond the Nation State: New Paradigms? Transatlantic Relations: Data, Privacy and Trade Law Read chapter Read first chapter

2018 | OriginalPaper | Chapter

Institutionalising Transatlantic Business: Financial Services Regulation in TTIP

Author : Davor Jančić

Published in: Institutionalisation beyond the Nation State

Publisher: Springer International Publishing

Log in

Activate our intelligent search to find suitable subject content or patents.

search-config
loading …

Abstract

This chapter analyses the regulation of financial services in transatlantic relations as a case study of the institutional approximation of the EU and US legal orders in the aftermath of the global financial crisis. The vastly interdependent EU and US financial regimes have produced significant cross-border effects, caused disputes and impeded transatlantic business. In this chapter, TTIP negotiations, regardless of their outcome, are observed as a benchmark for the institutionalisation of transatlantic regulatory cooperation in financial services. In particular, the chapter analyses the institutional implications of the newly established Joint EU–US Financial Regulatory Forum, which has replaced the EU–US Financial Markets Regulatory Dialogue. This is complemented by an insight into the position and actorness of business and civil society stakeholders. The chapter studies the contribution of these ‘soft’ institutional platforms to a greater convergence between the European and American rule-making processes and their respective approaches to financial services regulation.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

inform now
previous chapter Who Recognises Technical Standards in TTIP?
next chapter Something Borrowed, Something New: The TTIP Investment Court: How to Fit Old Procedures into New Institutional Design
Footnotes
1
Fahey (2016), p. 327; Peterson (2016), pp. 383 and 388ff.
 
2
Jančić (2018).
 
3
See more on the theoretical conceptualisation of this in the introductory chapter by Elaine Fahey in this volume. See on the broader context of institutional fragmentation in twenty-first century international trade in: Araujo (2017), p. 101.
 
4
Jančić (2015), p. 334.
 
5
Quaglia (2015), p. 167.
 
6
Posner (2009), p. 665. See also: Petersmann and Pollack (2003).
 
7
White (2015), pp. 301 and 316. To wit, §722(d) within Title VII of the Dodd–Frank Act, which is entitled ‘Wall Street Transparency and Accountability’, provides that ‘non-US persons will be regulated if: they have a direct and significant connection with activities in, or effect on, commerce of the US; or they contravene such rules or regulations as may be prescribed under the Act, necessary or appropriate to prevent the evasion of the relevant provisions’.
 
8
Article 4 of Regulation No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories, [2012] OJ L201/1, provides that counterparties’ clearing obligation applies ‘between two entities established in one or more third countries that would be subject to the clearing obligation if they were established in the Union, provided that the contract has a direct, substantial and foreseeable effect within the Union or where such an obligation is necessary or appropriate to prevent the evasion of any provisions of this Regulation’. See: Carr (2014).
 
9
Article 21b of the European Commission Proposal for a Directive of the European Parliament and of the Council amending Directive 2013/36/EU (known as CRD) as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures, COM(2016) 854, 23 November 2016.
 
10
EurActiv (2016). See also: Barker et al. (2016).
 
11
See in this respect: Quaglia (2014), p. 427.
 
12
Brummer (2014).
 
13
See examples of EU extraterritorial action in: Scott (2014), p. 87.
 
14
Coffee (2014), pp. 1259 and 1298.
 
15
Greenberger (2013), pp. 467–490.
 
16
Sassen (2010), pp. 23 and 38.
 
17
See essays in: Porter (2014); Grant and Wilson (2012).
 
18
See on this: Avgouleas (2015), pp. 659–694.
 
19
Chatham House (2014).
 
20
FinTech refers to financial technology and represents a growing industry using digital technology and innovation to provide services in both retail and corporate financial sectors (e.g. mobile stock trading apps, payment apps, money transfer apps and so on). TechFin is a term sometimes used to describe non-financial firms (e.g. in the areas of e-commerce, technology, or telecommunications) which use data and access to a wide pool of customers to enter the financial services markets.
 
21
European Parliament, Committee on Economic and Monetary Affairs, Draft Report on FinTech: The Influence of Technology on the Future of the Financial Sector, doc. no. 2016/2243(INI).
 
22
Zetzsche et al. (2017).
 
23
Allen (2013), p. 173; Webb et al. (2017).
 
24
Crotty and Epstein (2009).
 
25
Brummer (2014), p. 7.
 
26
See the introductory chapter by Elaine Fahey in this volume.
 
27
See accounts on this in: Jones and Macartney (2016), p. 4; Quaglia (2016).
 
28
European Commission, Report of the 15th Round of Negotiations for a Transatlantic Trade and Investment Partnership, 21 October 2016, at 5, http://​trade.​ec.​europa.​eu/​doclib/​docs/​2016/​october/​tradoc_​155027.​pdf.
 
29
The Transpacific Partnership Agreement (TPP), which was signed in February 2016 between 12 countries but which never entered into force due to the withdrawal of the US in January 2017, also contained a chapter on financial services (Chapter 11). In January 2018, TPP was superseded by a revised Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP11).
 
30
European Commission (2014).
 
31
Lehmann (2014). See also: Krahnen et al. (2017), p. 66.
 
32
Barbee and Lester (2014), p. 953.
 
33
See e.g. Jančić (2016), p. 896; Tourkochoriti (2014), p. 161.
 
34
See further the chapters in Part II on ‘Data Privacy’ in this volume.
 
35
See generally Alemanno (2015), p. 625; Meuwese (2015), p. 153.
 
36
Brummer (2015), p. 63.
 
37
Howarth and Quaglia (2016), p. 21.
 
38
Joint Statement, ‘Improvements in US-EU Regulatory Cooperation’, 18 July 2016, https://​ec.​europa.​eu/​info/​file/​69462/​download_​en?​token=​s9X_​MdYL.
 
39
On 22 September 2017, the EU and the US signed a bilateral agreement on prudential measures regarding insurance and reinsurance. This aims to lower supervisory burdens for insurers and reduce collateral and local presence requirements for reinsurers when they operate in a cross-border fashion. This agreement was a product of 20 years of informal discussions and over a year of formal negotiations. The agreement has provisionally applied since 7 November 2017.
 
40
Hellwig (2005), pp. 363–376 at 367ff.
 
41
Testimony of Ms Susan Schmidt Bies before the Committee on Financial Services, US House of Representatives, Washington DC, 13 May 2004, https://​www.​federalreserve.​gov/​boarddocs/​testimony/​2004/​20040513/​default.​htm.
 
42
Shaffer (2016), pp. 403 and 407.
 
43
Lovett (2011), p. 43.
 
44
Mügge (2014), pp. 316 and 320.
 
45
European Commission, ‘SIA in Support of the Negotiations on a Transatlantic Trade and Investment Partnership (TTIP) – Final Report’, March 2017, at 408. See also: Atlantic Council, Report ‘The Danger of Divergence: Transatlantic Financial Reform & the G20 Agenda’ (prepared by Chris Brummer), December 2013; Pugliese (2016), p. 285.
 
46
ibid 460.
 
47
European Insurance and Occupational Pensions Authority (2012).
 
48
Garcia-Duran and Eliasson (2017), p. 23; See also Fahey (2016).
 
49
Yiannibas (2017), pp. 343–360 at 350ff. See more general accounts in: Bignami and Charnovitz (2001), pp. 255–284; von Bülow (2010).
 
50
Young (2016), pp. 345 and 348–349.
 
51
Bickel (2015), pp. 557 and 586.
 
52
Transatlantic Business Council (2016).
 
55
These are: Association for Financial Markets in Europe, American Chamber of Commerce to the EU, BritishAmerican Business (UK), Federal Association of Securities Trading Firms (Germany), European Banking Federation, European Services Forum, Financial Services Forum (US), Financial Services Roundtable (US), Institute of International Bankers (US), Institute of International Finance, The City UK, Trans-Atlantic Business Council, and the US Chamber of Commerce.
 
58
Johnson and Schott (2013), p. 10.
 
59
Alexander et al. (2006), pp. 647 and 656.
 
60
See the call for the establishment of a wider international administrative body for financial supervision in: Pan (2010), p. 243.
 
61
See the transatlantic effects of uncoordinated policy responses in: Pagliari (2013), p. 391.
 
62
See to this end Pollack (2005), pp. 899 and 902.
 
63
See on the importance of balance between autonomy and coordination in: Parker (2016), pp. 1 and 5.
 
64
Fahey, introductory chapter in this volume.
 
65
See Fahey (2015).
 
66
See e.g. Petersmann (2016), p. 449.
 
Literature
Alemanno A (2015) The regulatory cooperation chapter of the Transatlantic Trade and Investment Partnership: institutional structures and democratic consequences. J Int Econ Law 18:625CrossRef
Alexander K et al (2006) Transatlantic financial services regulatory dialogue. Eur Bus Organ Law Rev 7:647, 656CrossRef
Allen HJ (2013) A new philosophy for financial stability regulation. Loyola Univ Chic Law J 45:173
Araujo BM (2017) Setting the rules of the game: mega-regionals and the role of the WTO. UCLA J Int Law Foreign Aff 21:101
Avgouleas E (2015) Regulating financial innovation. In: Moloney N et al (eds) The Oxford handbook of financial regulation. OUP, pp 659–694
Barbee I, Lester S (2014) Financial services in the TTIP: making the prudential exception work. Georgetown J Int Law 45:953
Bickel B (2015) Harmonizing regulations in the financial services industry through the Transatlantic Trade and Investment Partnership. Emory Int Law Rev 29:557, 586
Bignami F, Charnovitz S (2001) Transnational civil society dialogues. In: Pollack MA, Shaffer GC (eds) Transatlantic governance in the global economy. Rowman & Littlefield, pp 255–284
Brummer C (2014) Minilateralism: how trade alliances, soft law and financial engineering are redefining economic statecraft. CUP
Brummer C (2015) Soft law and the global financial system: rule making in the 21st century. CUP, p. 63
Coffee JC (2014) Extraterritorial financial regulation: why E.T. can’t come home. Cornell Law Rev 99:1259, 1298
Crotty J, Epstein G (2009) A financial precautionary principle: new rules for financial product safety. Wall Street Watch Working Paper no. 1
Fahey E (ed) (2015) The actors of postnational rule-making: contemporary challenges of European and international law. Routledge
Fahey E (2016) On the benefits of the Transatlantic Trade and Investment Partnership (TTIP) negotiations for the EU legal order: a legal perspective. Leg Issues Econ Integr 43:327
Garcia-Duran P, Eliasson LJ (2017) The public debate over Transatlantic Trade and Investment Partnership and its underlying assumptions. J World Trade 51:23
Grant W, Wilson GK (eds) (2012) The consequences of the global financial crisis: the rhetoric of reform and regulation. OUP
Greenberger M (2013) Derivatives in the crisis and financial reform. In: Wolfson MH, Epstein GA (eds) The handbook of the political economy of financial crises. OUP, pp 467–490
Hellwig H-J (2005) The transatlantic financial markets regulatory dialogue. In: Hopt KJ et al (eds) Corporate governance in context: corporations, states, and markets in Europe, Japan, and the US. OUP, pp 363–376 at 367ffCrossRef
Howarth D, Quaglia L (2016) The “Ebb and Flow” of transatlantic regulatory cooperation in banking. J Bank Regul 17:21CrossRef
Jančić D (2015) Transatlantic regulatory interdependence, law and governance: the evolving roles of the EU and US legislatures. Camb Yearb Eur Leg Stud 17:334CrossRef
Jančić D (2016) The role of the European Parliament and the US Congress in shaping transatlantic relations: TTIP, NSA surveillance and CIA renditions. J Common Mark Stud 54:896CrossRef
Jančić D (2018) The democratic puzzle of ‘Living’ megaregional agreements: TTIP and TPP. In: Vara JS, Sánchez-Tabernero SR (eds) The democratization of EU international relations through EU law. Routledge (forthcoming)
Johnson S, Schott JJ (2013) Financial services in the Transatlantic Trade and Investment Partnership. Peterson Institute for International Economics Policy Brief no. 13-26, October 2013, p 10
Jones E, Macartney H (2016) TTIP and the “Finance Exception”: venue-shopping and the breakdown of financial regulatory coordination. J Bank Regul 17:4CrossRef
Krahnen J-P, Noth F, Schüwer U (2017) Structural reforms in banking: the role of trading. J Financ Regul 3:66CrossRef
Lehmann M (2014) Volcker rule, ring-fencing or separation of bank activities: comparison of structural reform acts around the world. LSE Law, Society and Economy Working Paper no. 25/2014
Lovett WA (2011) Transnational finance regulation and the global economy. Tulane J Int Comp Law 20:43
Meuwese A (2015) Constitutional aspects of regulatory coherence in TTIP: an EU perspective. Law Contemp Probl 78:153
Mügge D (2014) Europe’s regulatory role in post-crisis global finance. J Eur Public Policy 21:316, 320CrossRef
Pagliari S (2013) A wall around Europe? The European regulatory response to the global financial crisis and the turn in transatlantic relations. J Eur Integr 35:391CrossRef
Pan EJ (2010) Challenge of international cooperation and institutional design in financial supervision: beyond transgovernmental networks. Chic J Int Law 11:243
Parker RW (2016) Four challenges for TTIP regulatory cooperation. Columbia J Eur Law 22:1, 5
Petersmann E-U (2016) The European Union’s “Cosmopolitan Foreign Policy Constitution” and its disregard in transatlantic free trade agreements. Eur Foreign Aff Rev 21:449
Petersmann E-U, Pollack MA (eds) (2003) Transatlantic economic disputes: the EU, the US, and the WTO. OUP
Peterson J (2016) Choosing Europe or choosing TTIP?: the European Union and the Transatlantic Trade and Investment Partnership. Eur Foreign Aff Rev 21:383, 388ff
Pollack MA (2005) The new transatlantic agenda at ten: reflections on an experiment in international governance. J Common Mark Stud 43:899, 902
Porter T (ed) (2014) Transnational financial regulation after the crisis. Routledge
Posner E (2009) Making rules for global finance: transatlantic regulatory cooperation at the turn of the millenium. Int Organ 63:665CrossRef
Pugliese S (2016) Divergences between EU and US in the financial regulation: what effects on the TTIP negotiations? Eur J Risk Regul 7:285CrossRef
Quaglia L (2014) The European Union, the USA and international standard setting by regulatory fora in finance. New Polit Econ 19:427CrossRef
Quaglia L (2015) The politics of “Third Country Equivalence” in post-crisis financial services regulation in the European Union. West Eur Polit 38:167CrossRef
Quaglia L (2016) The “Tug War” about the inclusion of financial services in TTIP. FEPS (Foundation for European Progressive Studies) Policy Brief
Sassen S (2010) A savage sorting of winners and losers: contemporary version of primitive accumulation. Globalizations 7:23, 38CrossRef
Scott J (2014) Extraterritoriality and territorial extension in EU law. Am J Comp Law 62:87CrossRef
Shaffer G (2016) Alternatives for regulatory governance under TTIP: building from the past. Columbia J Eur Law 22:403, 407
Tourkochoriti I (2014) The Snowden revelations, the Transatlantic Trade and Investment Partnership and the divide between US-EU in data privacy protection. Univ Arkansas Little Rock Law Rev 36:161
von Bülow M (2010) Building transnational networks: civil society networks and the politics of trade in the Americas. CUP
White T (2015) From the group of twenty to the group of two: the need for harmonizing derivatives regulation between the United States and the European Union. Law Contemp Probl 78:301, 316
Yiannibas K (2017) Democratising international trade and investment agreements in the European Union. In: de las Heras BP (ed) Democratic legitimacy in the European Union and global governance: building a European demos. Palgrave, pp 343–360 at 350ff
Young AR (2016) Not your parents’ trade politics: the Transatlantic Trade and Investment Partnership negotiations. Rev Int Polit Econ 23:345, 348–349CrossRef
Zetzsche D et al (2017) From FinTech to TechFin: the regulatory challenges of data-driven finance. EBI (European Banking Institute) Working Paper no. 2017/6
Metadata
Title
Institutionalising Transatlantic Business: Financial Services Regulation in TTIP
Author
Davor Jančić
Copyright Year
2018
Book
Institutionalisation beyond the Nation State

Print ISBN: 978-3-319-50220-5

Electronic ISBN: 978-3-319-50221-2

Copyright Year: 2018

DOI
https://doi.org/10.1007/978-3-319-50221-2_8

Premium Partner

    Image Credits