Building the Financial System of the 21st Century:

An Agenda forthe EU and U.S.

Session I

Regulatory Convergence in Transatlantic Capital Markets

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Transatlantic Capital Market:Convergence vs. Divergence

– Why is there Divergence?

– What is Convergence?

– Limits of Convergence

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Why is there Divergence?

– Institutional History· Domestic Economic Crises

– Different Political, Legal and Cultural Systems– Different Local Geography– Different Stages of Economic Development– Protectionism– Regulators’ Turf

· Trust / Distrust of Regulators in other Jurisdictions· Capture

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What is Convergence?

– Free Trade in Capital

– Level Playing Field

– Reduce Costs and Complexity

– Avoidance of Regulatory Arbitrage

– Facilitation of Best Practices

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Limits of Convergence

– One Size Does Not Fit All– Excessive Rigidity– Process Costs of Convergence– Complexity Costs of Convergence

– Is MiFID an Example of too much Convergence?

– Is the Accounting Roadmap an Example of Appropriate Convergence?

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Roadmap for (More?) Convergence

– Industry Initiative – Constructive Proposals

– Regulatory and Legislative Dialogue

– Political Will

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Marketplace ConsolidationNasdaq / LSE

– Who Cares?– What is the Structure of the Operating Model?

(e.g. holding company model or integrated trading)

– What are the Potential Benefits?– What are the Regulatory Constraints?– What are the Political Considerations?– Would Reciprocity – on practical terms – be

Permitted?

Session II

Current Issues Affecting the Regulation and Operation of the Asset Management

Industry in the EU and the U.S.

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Traditional Asset Management:U.S. – EU Critical Issues

– Developments in the U.S.· Separation of Fund Management and Distribution· Merrill Lynch / BlackRock· What is the Growth Potential of the Asset Management Business?

– Developments in the EU · Strong Growth Potential· Lack of Scale· Regulatory Barriers· UCITS: Single Passport for More Funds – Green Paper

– Transatlantic· Are Hedge Funds Growing too Much?

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Hedge Funds: Should they be Regulated?

– Can We Regulate the “unregulated”?

– Justifications for Regulation·Retail Investor Protection· Systemic Risk

– What Type of Regulation? ·Would Counterparty/ Prime Broker

Regulation be Sufficient?

Session III

Supervision of Cross-Border Activity of Banks

and Insurance Companies

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Financial Institutions Home – Host Issues

– Role of National Interests· Intra – EU· EU – U.S.

– Basel II·Different Approaches in Different Markets

– Prudential Supervision in Insurance·Risk – Sensitivity in Insurance Regulation·Collateralization as a Trade Barrier