Joint Statement on the EU-U.S. Joint Financial Regulatory Forum

The EU‑U.S. Joint Financial Regulatory Forum is a regular, high‑level meeting between U.S. financial authorities (U.S. Treasury and federal regulators) and EU financial authorities (European Commission and EU‑level supervisors). It is not a law‑making body and has no formal legal powers; rather, its mandate, as described in joint statements, is to:

• provide an ongoing "financial regulatory dialogue" where both sides exchange views on market and regulatory developments;
• discuss how each side’s rules affect the other’s markets, including cross‑border and extraterritorial effects; and
• support economic growth, financial stability, investor protection, market integrity and a level regulatory playing field by improving coordination and information‑sharing.
  The Forum typically meets about once a year, with a jointly agreed agenda (e.g., banking rules, capital markets, digital finance, FATCA) and issues a joint read‑out but not binding decisions.

In U.S. financial regulation these bodies play distinct roles:

• U.S. Department of the Treasury – Executive‑branch department that manages federal finances, advises the President on economic and financial policy, oversees much of the federal financial regulatory architecture, and works with other agencies and foreign governments to promote growth and safeguard the financial system (including through sanctions and anti‑money‑laundering policy).
• Federal Reserve Board (FRB) – Governing board of the U.S. central bank. It conducts monetary policy, helps maintain financial stability, and supervises and regulates many large banks and bank holding companies, as well as certain financial market utilities and payment systems.
• Commodity Futures Trading Commission (CFTC) – Independent regulator of U.S. derivatives markets (futures, options and most swaps). It sets and enforces rules to prevent fraud, manipulation and abusive practices, and to ensure transparent, financially sound derivatives markets.
• Federal Deposit Insurance Corporation (FDIC) – Independent agency that insures most bank deposits up to $250,000 per depositor per bank, supervises many state‑chartered banks for safety, soundness and consumer protection, and manages the orderly resolution of failed insured banks.
• Office of the Comptroller of the Currency (OCC) – Bureau within Treasury that charters, regulates and supervises national banks and federal savings associations, ensuring they operate safely and soundly, comply with laws and treat customers fairly.
• Securities and Exchange Commission (SEC) – Independent agency that oversees U.S. securities markets (stocks, bonds, mutual funds, many investment advisers and broker‑dealers). It administers and enforces federal securities laws to protect investors, maintain fair and efficient markets, and facilitate capital formation.

The listed EU bodies are the key EU‑level institutions for financial policy and supervision:

• European Commission – The EU’s executive arm. It proposes EU laws (including in banking, securities and insurance), negotiates and represents the EU externally in many financial matters, and enforces EU legislation once adopted.
• European Central Bank (ECB) – The central bank for the euro area. It sets monetary policy to maintain price stability and, via the Single Supervisory Mechanism, directly supervises the largest euro‑area banks and oversees the stability of the banking system.
• European Banking Authority (EBA) – EU agency that develops binding technical standards and guidelines for banking regulation, promotes consistent supervision of banks across the EU, and runs EU‑wide bank stress tests.
• European Securities and Markets Authority (ESMA) – EU securities and markets regulator. It works to enhance investor protection and promote stable, orderly securities and derivatives markets by drafting technical rules, coordinating supervision, and directly supervising some entities (e.g., certain data providers and EU benchmarks administrators).
• European Insurance and Occupational Pensions Authority (EIOPA) – EU authority for insurance and pension funds. It supports consistent insurance and pensions supervision, develops common rules (e.g., under Solvency II), and works to protect policyholders and pension scheme members.
• Single Resolution Board (SRB) – Central resolution authority for the EU Banking Union. It plans and executes the resolution (orderly wind‑down or restructuring) of failing significant banks and certain investment firms, aiming to protect financial stability and minimize costs to taxpayers and the real economy.

The Foreign Account Tax Compliance Act (FATCA) is a 2010 U.S. law aimed at combating offshore tax evasion by U.S. taxpayers. It:

• requires foreign financial institutions (FFIs), including EU banks and investment firms, to identify and report information about financial accounts held by U.S. taxpayers or foreign entities with substantial U.S. owners; and
• imposes a 30% withholding tax on certain U.S.‑source payments to FFIs that do not comply. It is relevant to the Forum because it has major cross‑border implications: EU financial institutions must adjust systems and processes to comply; EU authorities have negotiated inter‑governmental agreements with the U.S. to implement FATCA; and there are recurring concerns about data protection, operational burdens and the treatment of certain EU residents. Forum joint statements explicitly note discussion of FATCA issues affecting citizens and financial firms.

In financial regulation, "extraterritorial concerns" refer to situations where one jurisdiction’s laws or rules effectively apply to activities, firms or transactions outside its own borders. Examples include:

• U.S. rules (such as FATCA or certain derivatives regulations) that impose obligations on EU banks when they deal in U.S. securities or with U.S. clients; or
• EU rules that affect non‑EU firms accessing EU investors or markets. These rules can create overlapping, conflicting or duplicative requirements, raise questions about national sovereignty and data protection, and increase compliance costs. The Forum explicitly flags that both sides will keep discussing the implications of each other’s policies and laws in the other’s jurisdiction, "including extraterritorial concerns," to try to manage these cross‑border frictions.

The "European Savings and Investments Union" is a political objective, closely linked to the EU’s Capital Markets Union (CMU) project, rather than a separate legal institution. The idea is to:

• better channel Europeans’ large pool of household savings into productive investments (e.g., in companies, infrastructure and the green transition) across the EU; and
• give retail investors safer, simpler and more attractive opportunities to invest, while keeping strong consumer protection. Strengthening it would typically involve measures such as: deepening and integrating EU capital markets; harmonising key rules (for example, on insolvency and securities); making it easier and cheaper for companies, especially SMEs, to raise funds on markets; improving retail investor protection, disclosures and financial literacy; and encouraging cross‑border investment products. EU leaders explicitly link completing the Capital Markets Union with building a true "European Savings and Investment Union."

Forum meetings themselves do not produce binding regulations, but they can and do lead to concrete coordinated actions and policy outcomes, for example:

• Aligning regulatory reforms – sharing plans for implementing Basel III bank capital rules, bank resolution frameworks and insurance reforms, so that rules are broadly consistent and cross‑border banks face fewer conflicts.
• Supporting mutual recognition and equivalence – informing decisions such as EU equivalence for SEC‑registered central counterparties, SEC "substituted compliance" for certain EU securities‑based swap dealers, and continued PCAOB–EU audit oversight cooperation, which allow cross‑border market access under each side’s rules.
• Coordinating technical work and timelines – e.g., joint discussion of the U.S. move to T+1 securities settlement and ESMA’s assessment of shortening Europe’s settlement cycle; parallel work on sustainable‑finance and climate‑risk disclosures; or common approaches to operational resilience, digital finance and crypto‑assets.
• Enhancing joint positions in global fora – aligning U.S. and EU contributions to G20, Financial Stability Board (FSB) and FATF work on topics like sustainable finance, non‑bank financial intermediation, AML/CFT and crypto regulation. These outcomes appear over time in separate legislative or regulatory decisions, but the Forum’s role is to surface issues early, reduce regulatory clashes, and encourage compatible solutions on both sides of the Atlantic.