LONDON, May 21 (Reuters) – The U.S. Senate approved a reform of Wall Street on Thursday and President Barack Obama may be signing into law the most sweeping changes to financial rules since the 1930s as soon as next month.
It implements pledges the United States, the European Union and other leading countries in the Group of Twenty made in 2009.
With the United States set to adopt its reform soon — and thus easily meet G20 deadlines — the EU has to play catch-up in some cases. Banks are watching carefully as transatlantic differences are emerging that will affect business models.
The following compares U.S. and EU reforms.
PREVENTING MORE TAX-FUNDED BAILOUTS
The G20 wants to end the belief among banks they are “too big to fail” by requiring resolution mechanisms and “living wills” for speedy windups that don’t destabilise markets.
The Senate sets up an “orderly liquidation” process.
The EU, a collection of 27 states with no common insolvency laws, faces a much harder task of thrashing out a pan-EU mechanism even though cross-border banks dominate the sector.