Abstract

http://ssrn.com/abstract=2335626
 


 



Cross-Border Bank Branching Under the NAFTA: Public Choice and the Law of Corporate Groups


Eric J. Gouvin


Western New England University School of Law

1999

Connecticut Journal of International Law, Vol. 13, p. 257, 1999

Abstract:     
This Article examines a question left unresolved after the negotiation of the North American Free Trade Agreement (NAFTA): whether the banks of the member countries should be permitted to engage in the business of banking in the other member countries simply by branching across national borders. Under present law, the United States permits branching subject to extensive restrictions, while Canada and Mexico permit access to their banking markets only by acquisition or establishment of institutions chartered in their countries. While the NAFTA does not provide for unfettered branching across national borders, article 1403(3) of the NAFTA left the issue of cross-border branching open to subsequent negotiation. The question of whether the NAFTA countries should embrace cross-border branching may be informed by the recent U.S. experience in establishing nationwide branching. Just as the debate within the United States was based in part on principles of corporate law, so too should the international debate. Although enterprise principles from the law of corporate groups would weigh in favor of permitting branching as opposed to the more formal corporate structure requirements now in place, the member countries may each find that the existing structure provides their banks with certain non-tariff barriers to trade that they may be reluctant to surrender. In addition, when viewed through a public choice lens, the regulators in each of the countries, and especially the United States, will be reluctant to give up regulatory authority without getting something in return.

Number of Pages in PDF File: 47

Keywords: banking law, international trade, international finance, corporate law, NAFTA, North American Free Trade Agreement, Article 1403(3), banking markets, trade agreements, geographic expansion

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Date posted: October 10, 2013  

Suggested Citation

Gouvin, Eric J., Cross-Border Bank Branching Under the NAFTA: Public Choice and the Law of Corporate Groups (1999). Connecticut Journal of International Law, Vol. 13, p. 257, 1999. Available at SSRN: http://ssrn.com/abstract=2335626

Contact Information

Eric Joseph Gouvin (Contact Author)
Western New England University School of Law ( email )
1215 Wilbraham Road
Springfield, MA 01119
United States
(413) 796-2031 (Phone)
(413) 796-2038 (Fax)
HOME PAGE: http://www.law.wnec.edu/faculty/gouvin

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