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Building the Financial System of the 21st Century: An Agenda for the EU and U.S.

Building the Financial System of the 21st Century: An Agenda for the EU and U.S. Session I Regulatory Convergence in Transatlantic Capital Markets. Transatlantic Capital Market: Convergence vs. Divergence. Why is there Divergence? What is Convergence? Limits of Convergence.

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Building the Financial System of the 21st Century: An Agenda for the EU and U.S.

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  1. Building the Financial System of the 21st Century:An Agenda forthe EU and U.S.

  2. Session IRegulatory Convergence in Transatlantic Capital Markets

  3. Transatlantic Capital Market:Convergence vs. Divergence • Why is there Divergence? • What is Convergence? • Limits of Convergence

  4. Why is there Divergence? • Institutional History • Domestic Economic Crises • Different Political, Legal and Cultural Systems • Different Local Geography • Different Stages of Economic Development • Protectionism • Regulators’ Turf • Trust / Distrust of Regulators in other Jurisdictions • Capture

  5. What is Convergence? • Free Trade in Capital • Level Playing Field • Reduce Costs and Complexity • Avoidance of Regulatory Arbitrage • Facilitation of Best Practices

  6. Limits of Convergence • One Size Does Not Fit All • Excessive Rigidity • Process Costs of Convergence • Complexity Costs of Convergence • Is MiFID an Example of too much Convergence? • Is the Accounting Roadmap an Example of Appropriate Convergence?

  7. Roadmap for (More?) Convergence • Industry Initiative – Constructive Proposals • Regulatory and Legislative Dialogue • Political Will

  8. Marketplace ConsolidationNasdaq / LSE • Who Cares? • What is the Structure of the Operating Model? (e.g. holding company model or integrated trading) • What are the Potential Benefits? • What are the Regulatory Constraints? • What are the Political Considerations? • Would Reciprocity – on practical terms – be Permitted?

  9. Session IICurrent Issues Affecting the Regulation and Operation of the Asset Management Industry in the EU and the U.S.

  10. Traditional Asset Management:U.S. – EU Critical Issues • Developments in the U.S. • Separation of Fund Management and Distribution • Merrill Lynch / BlackRock • What is the Growth Potential of the Asset Management Business? • Developments in the EU • Strong Growth Potential • Lack of Scale • Regulatory Barriers • UCITS: Single Passport for More Funds – Green Paper • Transatlantic • Are Hedge Funds Growing too Much?

  11. Hedge Funds: Should they be Regulated? • Can We Regulate the “unregulated”? • Justifications for Regulation • Retail Investor Protection • Systemic Risk • What Type of Regulation? • Would Counterparty/ Prime Broker Regulation be Sufficient?

  12. Session IIISupervision of Cross-Border Activity of Banks and Insurance Companies

  13. Financial Institutions Home – Host Issues • Role of National Interests • Intra – EU • EU – U.S. • Basel II • Different Approaches in Different Markets • Prudential Supervision in Insurance • Risk – Sensitivity in Insurance Regulation • Collateralization as a Trade Barrier

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