Fact Sheet: Informal Financial Markets Dialogue

U.S.-EU Summit

The U.S.-EU Financial Markets Dialogue was created in March 2002 as a forum to discuss issues arising in connection with capital market developments between the United States and the EU.

It is led by the U.S. Treasury Department and the European Commission with participation by U.S. financial regulators (the Securities and Exchange Commission and the Federal Reserve Board) and their European counterparts. Several meetings have been held to date in Brussels and in Washington DC, the latest of which took place in Brussels in early June 2003.

The dialogue recognizes that the U.S. and EU both seek to promote trans-Atlantic growth that will generate real benefits to savers and investors through efficient and open capital markets and sound financial market supervision and regulation.

Both sides believe that achieving these shared objectives in substance is important and appreciate that the form by which each side goes about achieving these objectives may differ, in light of our diverse cultural, historical and legal traditions.

The dialogue has enhanced understanding and has been helpful in containing "spillovers" into each other's jurisdiction that arise from national law or regulation.

In this context, both sides believe that these technical, financial, regulatory and prudential issues are best handled bilaterally by direct contact between the appropriate financial and regulatory authorities. The dialogue is a two-way process.

U.S. authorities and firms are interested in a broad range of prudential/regulatory issues arising from the EU Financial Services Action Plan, which seeks to more fully integrate EU financial markets by 2005.

The U.S. believes that an efficient and well-regulated single EU capital market, which welcomes leading-edge products and technology, will stimulate economic growth in Europe, facilitate international capital flows and benefit U.S. firms and investors - in short, a "win-win" outcome.

The globalization of financial markets means that European financial institutions and firms are increasingly active in American financial markets and have a growing interest in U.S. prudential/regulatory issues.

The U.S. has also recently enacted new securities legislation in response to instances of corporate malfeasance and lapses in corporate governance.

The EU has been engaging with the U.S. in order to understand and better manage overlaps in regulation and supervision that can have broad international ramifications.

The U.S. and EU recognize the importance of this dialogue for their respective governments and private financial sectors and they aim to continue to facilitate meaningful progress on issues of interest to both sides in the coming months.