We don’t need it next year...We need it now.” So said Barack Obama last week, referring to the US Financial Reform Bill, designed to change the way in which the American financial services industry is regulated.
And, in public at least, President Obama appears to have support from Republicans and Democrats alike as they seek to demonstrate their commitment to reform on Wall Street.
During my recent visit to New York and Washington, I met politicians from right across the political spectrum and a degree of cross-party consensus was already apparent.
Even so, it took three votes before this bill gained enough support to even be debated in the US Senate!
Suffice to say, it is not just here in the UK where political considerations could have an impact on the shape of future regulatory proposals.
Governments are determined to tighten the regulation of the industry and to try to ensure a crisis such as we have just seen never happens again.
It is essential that, going with the grain of this, the industry engages positively and constructively to shape the new regulatory landscape. I know this is going on in London and the EU and my discussions with leading industry figures in the States confirmed that it is happening on the other side of the Atlantic as well.
Of any country in the world, the USA is perhaps best placed to regulate unilaterally. By taking the lead in such a way, its political leaders will no doubt hope to shape the agenda for G20 discussions in the summer.
But there is no guarantee that these reforms will find favour at a global level, nor is the USA’s position in any way inviolable.
In the same way that the European AIFM directive poses a direct threat to financial centres in Europe, the US Financial Reform bill could potentially undermine the international competitiveness of US financial centres.
That is why it is crucial that the EU and the US take their time and coordinate their regulatory efforts, not only to ensure consistently high standards throughout the global marketplace but, perhaps more importantly, to ensure the West’s leading financial centres – London and New York – are both well placed to compete with Asia and other emerging markets in the new, post-crisis world order.
Stuart Fraser is Chairman, Policy and Resources Committee, City of London Corporation