The negotiations on the Transatlantic Trade and Investment Partnership (TTIP) agreement started in 2013. Their 11th round will take place in Miami, Florida, from October 19–23, 2015. The European Commission (EC) proposed to establish within the TTIP a new framework for regulatory cooperation on financial services, with an aim to strengthen financial stability. Yet this proposal has proved to be an obstacle to the early completion of the negotiations. The US regulators in particular strongly oppose the idea. They claim that the insertion of financial services in the TTIP could compromise the regulatory reform efforts both in the US and in Europe.
Such a reaction could be played down as a case of minor misunderstanding, caused by cultural differences. Indeed, both the EU and the USA seem to prefer negative integration of Transatlantic financial markets (market-making – elimination of barriers). It could mean that both sides retained in the future their own financial rules each and applied them to all actors in the field on their respective territory. But such an arrangement would unduly give the better hand to financial actors with stricter «home» rules. Mutual recognition might be recommended as a possible remedy. But the critics of this recommendation, in their turn, warn that, with mismatches in financial rules, it could start a race to the lowest common denominator. Hence considerations ensue for harmonization instead of mutual recognition…
In fact, international financial stability is a public good, demanding a certain measure of positive integration (market correction). Basing itself upon the concept of multilevel governance, the proposed paper attempts to explore the contrastive benefits of decentralized or more centralized structure for financial governance of international proportions, as well as the institutional «fitness» of the USA and the EU respective financial regulation systems to promote it.
