ABSTRACT
This chapter traces the evolution of regulatory coordination efforts across the Atlantic and identifies three reasons for coordination failure. First, European and especially American authorities are wary of the expected distributional consequences of cross-border harmonization of financial regulation, especially in the area of over-the-counter (OTC) derivatives. Second, legislators and pre-existent legislation represent obstacles to cross-border cooperation. And third, the government networks that are expected to overcome these obstacles are not only lacking legal authority, but they are incomplete and weak due to domestic regulatory fragmentation. The chapter explains why the proposal to establish a framework for financial regulatory cooperation as part of Transatlantic Trade and Investment Partnership (TTIP) is ill-designed to address the underlying reasons for transatlantic coordination failure. It concludes by drawing implications for the evolution of global economic governance in terms of a balance between representation and effectiveness.
