“The securities
industry believes that the U.S.-EU Financial Markets Regulatory Dialogue can be
a starting point as well as an integral tool for promoting the best interests
of the U.S. and the EU economies and capital markets,” said Richard E.
Thornburgh, the chief risk officer for Credit Suisse Group and a member of the
Credit Suisse Group Executive Board.
“With this Dialogue in place, we believe it can be complemented with a
coordinated U.S. inter-agency Action Plan that can work with individual EU
member-states and Brussels to achieve an integrated, deep, transparent, and
liquid European capital market.”
In his testimony
before the House Financial Services Subcommittee on Domestic and International
Monetary Policy, Trade and Technology, Thornburgh stressed the economic
importance of the transatlantic capital market to the United States and the
EU. “This two-way flow of trade,
portfolio, and direct investment between our two regions exceeds $1 trillion
annually,” he said, “more solid evidence of the partnership cemented between
the United States and the EU.”
In 2003 U.S.
companies raised more than $171.1 billion in EU capital markets, of which
$164.3 billion was in corporate debt issues, and more than $6.8 billion in
equity, according to Thornburgh.
EU-based investors are a major supplier of capital and liquidity to the
U.S. market, adding $1 trillion of U.S. securities to their holdings since
2000.
Thornburgh’s testimony outlined
the following points:
·
The U.S.-EU Financial Markets Regulatory Dialogue is working
– we need to build on what is now in place;
·
The EU capital markets are both a critical source of
investment capital for U.S. companies, and vital to U.S. investors, asset
managers, and pension and mutual funds seeking portfolio diversification;
·
Proper implementation of the “Action Plan” or “FSAP” is
essential for the creation of an integrated, transparent, and liquid capital
market; and
·
We recommend a U.S. Action Plan to complement the
implementation of FSAP including:
o
Placement of a Treasury Attaché in Brussels;
o
Increased inter-agency coordination – particularly utilizing
State Department contacts in EU member states;
o
Formalized regulatory dialogue between the SEC and the
Committee of European Securities Regulators (CESR) on regulatory convergence,
as has been started; and
o Greater Congressional/Parliamentary interaction.
