Financial Regulatory Forum

Few post-crisis restrictions in finance trade-WTO

By Jonathan Lynn

GENEVA, Feb 9 (Reuters) – Few measures have been taken to curb trade in financial services in the wake of the crisis although the volumes have dropped sharply, according to a study by the World Trade Organization.

But measures to support troubled institutions will need to be unwound carefully to avoid distorting competition, the WTO said in an restricted report to members, dated Feb. 3, a copy of which was obtained by Reuters.

“The financial crisis does not seem to have prompted a widespread introduction of trade restrictions in financial services,” said the report by the WTO secretariat, prepared at the request of members.

With only a few exceptions, countries maintained policies regarding typical market access limitations such as foreign equity caps or incorporation requirements.

While some countries such as India slowed down previously announced liberalisation plans, others such continued to open up financial services markets, such as Malaysia, which announced a broad liberalisation package in April 2009, it said.

Special bankruptcy court for banks mulled in U.S. Senate

By Rachelle Younglai

WASHINGTON, Jan 11 (Reuters) – Key U.S. senators are considering the creation of a special bankruptcy court for troubled financial services firms, a person familiar with the plans said on Monday.

Senate Banking Committee members are trying to toughen up parts of a draft bill that overhauls how the financial system is supervised. The draft, introduced by Senate Banking Committee Chairman Christopher Dodd, would create a system to unwind troubled financial firms.

But members of the committee want a more specific and tougher regime to deal with troubled financial firms after the federal government used billions of dollars in taxpayer funds to prop up firms like Bank of America.