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21 March 2014
Finance Watch: TTIP risks ‘race to the bottom’ in financial services regulation
The independent public interest group Finance Watch said on Wednesday that there was no proven case for including financial regulation in the EU-US trade deal. Speaking at a hearing of the ECON committee in the European Parliament, Secretary General of the organisation Thierry Philipponnat said he found it difficult to see how this would not lead to a "race to the bottom" in financial services regulation.
Mr. Philipponnat also warned that TTIP could constrain regulators from coming up with the rules needed to make financial services work better for society. He is concerned that there would be a “regulatory chill” in the US and Europe if both sides adopted a legally binding treaty that included financial services, and would put private interests ahead of public good.
“We are concerned that the EU’s approach to regulatory cooperation (equivalence, mutual recognition and/or substituted compliance) will encourage convergence around the lowest common standards, not the highest,” said Mr Philipponnat.
The EU has been pushing for the inclusion of financial services in TTIP, something that the US is trying to avoid due to fears that Europe's financial sector may challenge recently introduced reforms, such as the Dodd Frank act.