The Senate Banking Subcommittee on Security and International Trade and Finance held a hearing this afternoon to examine the risks that currently confront the global financial system and world economy.  With European leaders struggling to agree on terms for a Eurozone rescue plan, Treasury Under Secretary Lael Brainard nevertheless reassured Senators that the EU is capable of handling the crisis.  During the Q&A session, Senators Warner (D-VA) and Johanns (R-NE) both voiced skepticism that EU member nations are actually implementing key financial reforms, noting that the lack of progress could lead to regulatory arbitrage and put U.S. firms at a competitive disadvantage.  This report analyzes the hearing.

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