Jan. 31 (Bloomberg) -- The U.S. and the European Union will renew their efforts to find a common solution for handling international bank failures, according to a joint statement issued today after talks in Washington.
“Both participants agreed on the need to develop a shared understanding of the challenges involved in the effective resolution of large cross-border banks,” the statement said. “They committed to give priority to the issue in 2014 with the view to continuing to work together to find practical solutions to the identified challenges.”
Regulators on both sides of the Atlantic seek to prevent a repeat of the government-funded rescues that occurred after Lehman Brothers Holdings Inc. collapsed in 2008. The U.S. has enacted a series of regulatory changes under the Dodd-Frank Act, while the EU is in the process of creating a euro-area banking union.
The U.S. and the EU said they would try to “minimize the divergence on margin requirements” for over-the-counter derivatives, particularly once new international standards have been widely adopted. They pledged to consult each other where possible so that the new standards can be applied consistently.
EU and U.S. officials used this week’s talks to follow up on the Basel III capital accords and on pledges by the Group of 20 nations to strengthen financial regulation and prevent a future crisis, according to the statement. In addition to bank failures and derivatives rules, they also pledged to cooperate on supervising audit providers and “noted with concern” differences in accounting standards.
“Both the United States and Europe have repeatedly shown their commitment to robust international implementation of the G-20 financial reforms and are committed to working together to discuss differences in approaches to financial regulation,” said Mark Sobel, the U.S. Treasury Department’s deputy assistant secretary for international monetary and financial policy, in a statement.
Nadia Calvino, who led the EU’s delegation, said Europe and the U.S. have made progress and now need to make sure they can rely on each other to follow through on past agreements and set up compatible systems.
“We have to ensure that our rules capture the international reality of modern-day finance,” Calvino said in a statement.
The next round of talks will be in Brussels in July.
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