Shorouk Express
A third indicated that rules would likely be less ambitious to garner support of all members, as they said there would be no point agreeing to standards which are then not implemented by certain jurisdictions.
But the existential threat of a full U.S. pullout appears to be too loaded an issue to address. None of the standard-setters POLITICO spoke with would comment directly, either on the record or on background, on whether they thought the U.S. would pull out, or what it would mean for their organizations.
Limping on
For now, global watchdogs are waiting for the 180-day deadline for a decision on U.S. withdrawals to pass.
“It’s a guessing game right now,” said Thorsten Beck, an economist who heads the Florence School of Banking and Finance at the European University Institute. Although Beck did not predict a full U.S. withdrawal from the bodies, he said America is likely to “take less of an interest in being part of these discussions” and instead “concentrate more on what is supposedly best for them.”
If so, that would point to more regulatory fragmentation, meaning cross-border finance firms will have to contend with different rules in different countries. In a situation where the U.S. remains a member of these bodies, but no longer actively participates in creating and following global finance rules, “you do not have development of global regulatory standards anymore. Everybody does their own thing,” Beck said.
If the U.S. does pull out, the global bodies would become “more of a social club, a talking club and not relevant anymore,” Beck added. Emerging powers like the BRICs, and in particular China, would likely play a larger role in global talks on finance regulation — a trend one of the top officials POLITICO spoke with echoed.
