Financial Services & Markets

Financial leaders from around the world converged on Washington for meetings of the International Monetary Fund (IMF) and the World Bank April 12-13 against the backdrop of growing concerns about the global economy. Simon Johnson, IMF director of research, said the subprime mortgage housing crisis in the United States has brought economic growth in the world's largest economy nearly to a standstill. The U.S. economic turmoil, he added, has prompted the IMF to lower its projection for global growth in 2008 to 3.7 percent, well below its earlier prediction of 4.9 percent. In addition, European Union member states that have adopted the euro currency are slowing to 1.4 percent projected growth rate in 2008. Johnson attributed the anemic growth rate to weakening external demand due to the U.S. downturn, a stronger euro, continued financial market strains and rising energy costs. He added that housing downturns have been a problem in some European countries. Jaime Caruana, director of the IMF's Monetary and Capital Markets Department, said there has been a "collective failure" to appreciate the economic damage caused by the subprime crisis.

The EU's Economics and Financial Affairs Council, meeting in Brussels May 8, 2007, reached a consensus on the policy direction for the European Union regarding hedge funds and provided related guidance to the European Commission. U.S. Treasury Deputy Secretary Robert M. Kimmitt issued the following statement supporting the Council's conclusions:

"The Council's statement today underscores the significant progress this year advancing international work related to the hedge fund industry and in reaching a consensus on the appropriate path forward. Their conclusions will help ensure a productive discussion among the G-8 finance ministers in Potsdam this month. These findings demonstrate that the European Union and the United States share consistent approaches to monitoring these investment vehicles. In particular, the Council's conclusions demonstrate convergent views on the benefits of hedge funds in promoting efficient and dynamic financial markets and the important role all actors play promoting financial stability and protecting investors. This approach mirrors the philosophy of the Principles and Guidelines issued by the U.S. President's Working Group on Financial Markets in February."

2008: World Finance Leaders Meet as Concerns on Global Economy Grow (Apr 11, 2008) | U.S. Files WTO Case Against China Over Financial Information Services (Mar 3, 2008) | Treasury's Paulson Comments on Foreign Investment in the United State, CFIUS (Jan 23, 2008) | Further Amendment of Executive Order 11858 Concerning Foreign Investment in the United States (Jan 23, 2008)

The United States and the European Union seem poised to move their economic integration to a new, higher level by lowering regulatory and other hurdles to mutual direct investment and integration of financial markets, according to official statements and experts' opinions. U.S. Deputy Secretary of the Treasury Robert M. Kimmitt recently said that to enhance transatlantic economic ties, both sides have to “address and reconcile our systemic differences and thereby reduce obstacles to economic growth.” Kimmitt welcomed German Chancellor Angela Merkel’s initiative on the trans-Atlantic market and said the United States and the EU should come to their April 30, 2007, summit meeting with a set of specific proposals to deepen their economic relations and develop a common approach to the global economy. “Such an initiative recognizes that progress on economic and financial matters can help improve the overall political relationship between Europe and America, and can provide a strong foundation upon which to rely during periods of political turbulence,” Kimmitt told a conservative parliamentary group in Berlin on March 19. 

2007: Treasury's Kimmitt on Sovereign Wealth Funds (Dec 26, 2007) | Treasury's McCormick Testifies on Benefits, Concerns Over Sovereign Wealth Funds (Nov 14, 2007) | Treasury's Kimmitt on the EU's Conclusions on Hedge Funds (May 8, 2007) | U.S., EU To Expand Trans-Atlantic Investment Market (Mar 27, 2007) | Regulators Make It Easier for Foreign Companies to Exit U.S. Market (Mar 23, 2007) | Securities Regulators Must Face Challenges of Global Markets (Mar 12, 2007) | Treasury's Ryan Reviews Hedge Fund Regulation (Mar 1, 2007) (Guidance on Hedge Funds) | European Commission Press Release: EC Welcomes New U.S. Proposals Allowing Easier Deregistration from Capital Markets (Feb 14, 2007) | Transnational Capital Markets Challenge U.S., European Regulators (Jan 30, 2007) | Treasury: Reporting of Cross-border Wire Transfer Data Could Help Combat Money Laundering, Terrorist Financing (Jan 17, 2007)

The SEC and the Committee of European Securities Regulators (CESR) published a joint work plan on August 2, 2006, that will be implemented immediately. The work plan is a direct output from the December 2005 meeting between SEC Chairman Christopher Cox and CESR Chairman Arthur Docters van Leeuwen, at which they emphasized their desire to build on the dialogue between the SEC and CESR in a concrete and practical manner. The work plan will serve to guide the SEC-CESR Dialogue in the immediate future. (Previous announcement relating to the SEC-CESR Dialogue) The main focus of the work plan is the application by internationally active companies of International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (GAAP) in the United States and the European Union, respectively. In addition, the staff of the SEC and CESR will forge a closer dialogue on the modernization of financial reporting and disclosure information technology, and regulatory platforms for risk management. Charles McCreevy, European Commissioner for Internal Markets and Services, issued a statement welcoming publication of the Work Plan.  

2006: SEC Commissioner Downplays Concern About Financial Globalization (Nov 2, 2006) | SEC and CESR Launch Work Plan Focused on Financial Reporting Developing: Cross Atlantic Financial Markets (Aug 2, 2006) | SEC Releases Fact Sheet on Potential Cross-Border Exchange Mergers (Jun 16, 2006) | U.S., European Insurance Supervisors Agree on Model Memorandum of Understanding (Mar 21, 2006) | Treasury's Sobel Looks "Inside the U.S.-EU Financial Dialogue" (Mar 9, 2006) | SEC's Atkins Remarks at Brussels Financial Services Conference (Jan 31, 2006) | Treasury Names Financial Attachés in Brussels and Tokyo (Jan 23, 2006)

2005: Easier Rules Proposed for Foreign Firms To Exit U.S. Stock Market (Dec 15, 2005) | Announcement of Cooperation Between SEC and CESR (Dec 15, 2005) | SEC's Atkins Speaks to the EP Financial Service Forum (Oct 26, 2005) | FTC's Majoras on Health Care, Financial Services Markets (Sep 15, 2005) | Secretary Snow, EU Commissioner McCreevy Meet in New York (Apr 20, 2005) | CFTC-CESR Cooperation Agreement on Financial Derivatives (Mar. 31, 2005)

2004: Summit Report on U.S.-EU Financial Markets Reg. Dialogue (Jun 26, 2004) | Federal Reserve Governor Testifies on U.S.-EU Regulatory Dialogue (May 13, 2004) | House Financial Services Hearing: U.S.-EU Regulatory Dialogue (May 13, 2004) | European Financial Services Action Program Good for World Economy (Jan 29, 2004)

2003:  Treasury's Quarles: U.S.-EU Cooperation on Financial Issues (Nov 14, 2003) | U.S.-EU Informal Financial Markets Dialogue (Jun 25, 2003) | Treasury Reviews Scope of U.S.-EU Economic Relations (Feb. 13, 2003)

The U.S.-EU Financial Markets Dialogue was created in March 2002 as a forum to discuss issues arising in connection with capital market developments between the United States and the EU, says a June 2003 fact sheet. It is led by the U.S. Treasury Department and the European Commission with participation by U.S. financial regulators (the Securities and Exchange Commission and the Federal Reserve Board) and their European counterparts. The dialogue has enhanced understanding and has been helpful in containing "spillovers" into each other's jurisdiction that arise from national law or regulation.