Fix to International Bank Regulation Posed as ‘Protectionism’ Fears Grow
By Donna Borak
A top financial analyst is calling for the U.S. Trade Representative to work with the banking agencies to help establish an international framework for financial regulation. In a paper released Tuesday, Karen Shaw Petrou, managing director of Federal Financial Analytics, warns that regulators in multiple countries are in danger of adopting protectionist regimes due to a widespread fear that their foreign counterparts are not doing enough to prevent another financial crisis. Without intervention, she says, the dream of a so-called global framework for financial institutions is likely to die quickly. “Given that the reality, not the hope, is a breakdown in the global framework, countries are now drawing up the barricades,” Petrou says.