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“Market Power without a Single Market:
The New Transatlantic Relations in Financial Services”
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I. Introduction
American and European banks, insurance companies, asset managers and other
financial services companies have long competed in multiple jurisdictions with distinct
and sometimes incompatible regulatory systems. Financial authorities on both sides of
the Atlantic are seasoned to the classic problems this arrangement often sparks. Since the
mid-1990s, however, differences in regulatory approaches have been at the center of a
host of intense and increasingly frequent conflicts.
This paper explores a change in the way US and European officials manage them.
While some remain very much unresolved, a clear pattern is emerging. Until three years
ago, US regulators jealously guarded their regulatory sovereignty in handling
transatlantic disputes. They typically exported American solutions by pressuring,
persuading or outmaneuvering their European counterparts and resisted making
accommodations to European demands and proposals. If adjustments were going to
occur, European national regulators, in intense competition with one another, made them.
Recently, by contrast, US authorities have made significant concessions in several high-
profile transatlantic conflicts, and there are strong indications this behavior will continue.
European regulators are not achieving all their goals but are doing much better than in the
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An earlier version of this paper was presented at “The New Transatlantic Agenda and the Future of
Transatlantic Economic Governance,” the Robert Schuman Centre for Advanced Studies, European Union
Institute in Florence, June 18-19, 2004. I thank Sir Nigel Wicks and the other participants of that workshop
for their comments. I also thank Abraham Newman, Tiberiu Dragu, Joel Mathen, Scott Roecker and
Maryam Zarnegar Deloffre.
Convention