Global Securities Regulation after the Financial Crisis

The global financial crisis requires a coordinated international response, but political obstacles stand in the way of a comprehensive solution. This article suggests that international cooperation in securities regulation is most feasible-though still politically difficult-if the subject of securities regulation is divided into pieces, and global regulators concentrate solely on the portion that involves interaction among sophisticated institutional investors. Even though the crisis originated in this sector, it is the domain in which there is the most global commonality of interests. By contrast, regulation of the retail segments of investment is plagued by particularly deep differences in history and institutional context, making it wise to move this subject of regulation off the near-term reform agenda. The article suggests a number of directions such convergence might take, including creating a dispute resolution system accessible to the transnational institutional investor community.