Toward Transatlantic Convergence in Financial Regulation

Abstract:     
This Article reviews the historical background of the Glass-Steagall Act of 1933 along with the developments in the markets that led to the Gramm-Leach-Bliley Act of 1999. It analyzes the discussions on the Volcker Rule in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 from a comparative perspective. It shows how the reform in the United States may impact financial institutions and markets in other jurisdictions. Germany and Switzerland, where universal banking is the hallmark of the financial services industry, are the primary jurisdictions of interest. After taking a historical and political look at the regulation of financial institutions in the United States and Europe, this Article touches on the issues of global regulatory reform to see if the global solution might fit into the structural issues of financial institutions and systems. Building on the discussions on convergence in bank corporate governance, it predicts Transatlantic convergence in the financial system and structure of banking business preceded by convergence in the practices and strategies of financial institutions in the United States and Europe.

Number of Pages in PDF File: 50

Keywords: European financial services industry, Glass-Steagall Act, Gramm-Leach-Bliley Act

JEL Classification: F30, K22

working papers series