TRANSATLANTIC TRADE AND INVESTMENT PARTNERSHIP (TTIP) AND REGULATION OF FINANCIAL MARKETS

Ana Vizjak () and Maja Vizjak ()
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Ana Vizjak: Faculty of Tourism and Hospitality Management, Opatija
Maja Vizjak: Faculty of Tourism and Hospitality Management, Opatija

Economic Thought and Practice, 2016, vol. 25, issue 1, 319-336

Abstract: Trade in financial services is an important chapter in transatlantic trade negatiations in the Transatlantic Trade and Investment Partnership (TTIP), i.e. partnership agreement between the USA and the EU. In 2013, 38% of EU financial services (insurance excluded) was exported to the US and it represented 48% of US imports of financial services (insurance excluded). Transatlantic financial services trade thus certainly represents an opportunity, but also yields several challenges. On both sides of the Atlantic, reforms of prudential regulation have been undertaken since the 2007 subprime crisis, to rebuild confidence in their financial markets. In this context of substantial domestic reforms, NGO - Non-governmental organisations are concerned about the potential impact of trade agreements (including the future TTIP) on these amended regulatory measures. Discussions in TTIP go beyond the preservation of regulatory autonomy. Strong regulatory autonomy in the field and little incentive for harmonisation has resulted in significant regulatory divergence on both sides of the Atlantic. Stronger co-operation would avoid transaction costs created by regulatory fragmentation. Commitment on both market access and non-discrimination are set out by the parties in the dedicated schedules. Trade agreements then provide an exception safeguarding the right of states to undertake prudential regulation, known as the 'prudential carve-out'. Scientific methods used in this paper are methods of systematic analysis, the dialectical and logical method, mostly in the inductive-deductive combination, and vice versa.

Keywords: TTIP; financial markets; CETA; Dodd-Frank Act (search for similar items in EconPapers)
JEL-codes: F13 G15 (search for similar items in EconPapers)
Date: 2016
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