July 15 (Bloomberg) -- The European Union’s top financial services official today urged the U.S. to drop its opposition to including financial regulation within the scope of free trade talks.
Michel Barnier, the EU’s financial services chief, pressed U.S. Treasury Secretary Jacob J. Lew on the matter at a meeting today in Washington, according to an EU official. Barnier told Lew that including rulemaking for banks and markets in the negotiations would be an opportunity to better align standards and wasn’t a pretext to weaken them, according to the official, who couldn’t be named in line with EU policy.
A last-minute accord on swaps rules brokered by the EU and U.S. last week showed the need for “a pre-agreed framework to discuss and resolve” disagreements on financial regulations, Barnier said in a speech earlier today. Such a framework would “avoid brinkmanship and uncertainty in our financial markets,” he said.
The U.S. and 28-nation EU, which already have the world’s largest bilateral economic relationship, are seeking to deepen ties and overcome sluggish growth on both sides of the Atlantic. The accord, known as the Trans-Atlantic Trade and Investment Partnership, would create a zone with about $33 trillion in annual output.
During the meeting with Barnier, Lew said financial regulatory cooperation should continue in existing global forums such as the Group of 20 economies and the Financial Stability Board, according to a statement from the U.S. Treasury. Lew said such an approach would be consistent with existing international timelines, the statement said.
Barnier repeated previous requests for the U.S. to rethink planned rules for U.S-based subsidiaries of overseas banks, warning that the proposals would leave EU banks at a competitive disadvantage, according to the EU official.
Barnier also urged progress in aligning U.S. and international accounting standards, warning that some in the EU are questioning the future of the International Accounting Standards Board if headway isn’t made soon. The IASB sets accounting rules applied in over 100 countries including within the EU.
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