Corporate & Securities Law

Roundtable publishes Blueprint for policy reform

By Werner R. Kranenburg

As announced in this previous post, the Financial Services Roundtable has now published its own capital markets competitiveness report, entitled The Blueprint For U.S. Financial Competitiveness. (full report, executive summary)

It follows three such reports published in the past year to date, by the so-called Paulson Committee (November 2006), Bloomberg/Schumer (January 2007) and Daley/Culvahouse (March 2007). (Search WV&Z for more on each.) The Roundtable’s Blue Ribbon Commission on Enhancing Competitiveness is co-chaired by Richard M. Kovacevich and James Dimon.

The Roundtable’s Blueprint goes one further however and “build[s] upon the recommendations” of its predecessors, producing ten policy reforms encompassing 68 recommendations. The policy reforms include principles-based regulation and litigation reform: “Chief among the internal threats facing financial market competitiveness in this country is the U.S. legal framework, including the litigious nature of our system in general and securities litigation and class actions in particular.” (p.41) An excerpt:

[L]egal certainty is less of a goal in the U.K. where the potential for litigation or formal supervisory actions is not as great as it is in the U.S. This reflects not only some broader societal differences between the U.S. and the U.K., but, more importantly, the U.K.?s more prudential approach to financial supervision. Prudential supervision reduces the need for litigation and enforcement actions because it encourages firms and regulators to address areas of concern before they develop into significant problems. (p.32) (Subscribe to WV&Z)

What’s more: The article Investor Litigation in the U.S. - The System is Working (February 2007) by Jay W. Eisenhofer and Gregg S. Levin (then) of Grant & Eisenhofer PA provides a counterview to the findings of and recommendations by the first two competitiveness reports and also see SEC Commissioner Kathleen L. Casey’s address to the Institute for Legal Reform’s Annual Legal Reform Summit last month, which in large part is about competitiveness and refers to the three aforementioned reports. (Subscribe)

Full post as published by With Vigour and Zeal on November 09, 2007 (boomark / email).