Comparing EU and US responses to the financial crisis

Karel Lannoo ECMI Policy Brief No. 14 (Jan. 2010)

Main Story:

Grey matters


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Since 2003, the EU and the US have conducted a vibrant regulatory dialogue on financial regulation, but domestic priorities seem to have taken precedence in response to the financial crisis. This paper compares the institutional and regulatory changes occurring on both sides of the Atlantic.
On the institutional side, it compares macro- and micro-prudential reforms. On the regulatory side, it compares four key areas: bank capital requirements, reform of the OTC derivative markets and the regulation of credit ratings agencies and hedge funds. It concludes by highlighting certain implications for the regulatory dialogue.

CFR comment

An excellent brief overview of the contrasting responses of the US and EU to the financial crisis, this six page paper provides a summary of the different approaches and points out problems these differences are likely to cause in the future.