NEW YORK (
) --The legislation known as Dodd-Frank does little to encourage collaboration between foreign governments and the U.S. over banking regulation, according to Jay Westbrook, a University of Texas Law Professor who has authored several papers with Massachussetts Senator-Elect Elizabeth Warren.
"In all of Dodd-Frank, there's just a single 10-line section," that deals with coordinating international regulation of the largest financial institutions, Westbrook laments. He characterizes it as stating that "the President ought to make nice with everybody and cooperate,"--language he calls "not very helpful."
Westbrook would like to see new legislation giving the President "more authority to reach binding cooperative arrangements," with other governments. Particularly important, he argues, are laws regarding systemically important financial institutions, derivatives and sovereign debt.
Westbrook did not respond to follow-up questions asking whether he believes Warren will take on these issues in the Senate. Warren has so far kept mum about the specific committee assignments she will seek, and a call to her campaign office was not returned.
An in-house lobbyist at a multinational financial services company acknowledges that Dodd-Frank does little to encourage international cooperation among foreign governments, though he says there are "other mechanisms for doing so," such as the Basel Committee on Banking Supervision. He says the U.S. and Europe have generally been cooperating on financial reform, though Asia has not. He argues this is because Asia did not have a banking crisis, and it may want to compete with the U.S. and Europe for international banking business by having more business-friendly regulation.
Written by Dan Freed in New York