The European Commission and the US Treasury have exchanged letters confirming their intentions of increasing financial regulatory cooperation with each other. In a letter to US Secretary of the Treasury Jacob Lew, the Commission's vice president Valdis Dombrovskis said that the continued cooperation to overcome regulatory challenges will strengthen the case for “even more purposeful bilateral regulatory cooperation geared towards the further promotion of financial stability; investor and consumer protection; fair, orderly, and efficient markets; and capital formation on both sides of the Atlantic”.

More transparency and compatibility, less uncertainty

The letters outline the new arrangements for cooperation between EU and US financial regulators and supervisors. The Joint EU-US Financial Regulatory Forum has been created to facilitate discussion between the two sides. The forum will meet “as early and often as possible” to discuss respective rules and policies to improve transparency, reduce uncertainty, and generally promote better compatibility of EU and US rules in consistency with international standards.

The document, which outlines how the EU-US cooperation will work, states that the general operational objective is to “improve transparency, reduce uncertainty, identify potential cross-border implementation issues, work towards avoiding regulatory arbitrage and towards compatibility, as appropriate, of each other’s standards, and, when relevant, promote domestic implementation consistent with international standards”.

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CTMfile take: the EU continues to move forwards to improve financial regulation and increase transparency in the banking sector and financial markets. Interesting to note that both Lew and Dombrovskis write in their letters that the remit of the new Joint EU-US Financial Regulatory Forum will not cover negotiations on the Trans-Atlantic Trade and Investment Partnership (TTIP).