Europe and US head for G20 showdown over protectionism
Monday March 09 2009
Europe and the US could be heading for a showdown at the G20 summit next month after the recently appointed head of the US Securities and Exchange Commission, Mary Schapiro, signalled an end to efforts for convergence of financial regulation in the two regions.
The move, which is understood to have taken the UK Treasury and the European Commission by surprise, could prove to be an unwelcome distraction at the G20 summit which is designed to map out a global solution to the financial crisis, according to reports.
Ms Schapiro, who was appointed in January to succeed Christopher Cox as head of America's chief financial regulator, is said to believe that fixing domestic regulation problems are a priority compared with seeking convergence.
The shift in mood was outlined at a European bankers conference early last week by Erik Sirri, director of the SEC's trading and market divisions.
And it comes after years of efforts to finalise a covergence plan, particularly of accounting standards and mutual recognition of securities regulations.
Since April 2007, a body known as the Transatlantic Economic Council has been working on a series of roadmaps that were seen as essential in creating the kind of co-operation covergence requires.
But SEC officials have made it clear in private that these roadmaps have been put on the back burner under orders from Ms Schapiro.
A spokesman for the SEC would not comment about the roadmaps but indicated the regulator has much to do in the United States. "We believe in co-operation," he said, "but also need to take in to consideration national processes."
The SEC moves are expected to increase fears of US protectionism, which have dogged President Obama's recent efforts to successfully launch an economic stimulus package.
- Ailish O'Hora
