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Financial Services Law Insights and Observations

U.S.-EU release statement on Joint Financial Regulatory Forum

Financial Crimes Digital Assets Of Interest to Non-US Persons Department of Treasury EU Central Bank Digital Currency Stablecoins Anti-Money Laundering Combating the Financing of Terrorism Fintech Covid-19 Climate-Related Financial Risks LIBOR

Financial Crimes

On March 1 and 2, EU and U.S. participants, including officials from the Treasury Department, Federal Reserve Board, CFTC, FDIC, SEC, and OCC, participated in the U.S. – EU Joint Financial Regulatory Forum to continue their ongoing financial regulatory dialogue. Matters discussed focused on six themes: “(1) market developments and current assessment of financial stability risks, (2) operational resilience and digital finance, (3) sustainable finance and climate-related financial risks, (4) regulatory and supervisory cooperation in capital markets, (5) multilateral and bilateral engagement in banking and insurance, and (6) anti-money laundering and countering the financing of terrorism (AML/CFT).”

While acknowledging that both the U.S. and EU are “experiencing robust economic recoveries,” participants warned that significant uncertainty and risks are created by the current geopolitical situation, as well as challenges stemming from the ongoing Covid-19 pandemic, high energy prices, and supply-chain bottlenecks. “[C]ooperative international engagement to mitigate financial stability risks remains essential,” participants stressed. During the meeting, participants also discussed recent developments related to crypto-assets, digital finance, and so-called stablecoins, as well as the potential for a central bank digital currency, and “acknowledged the importance of ongoing international work on digital finance and recognized the benefits of greater international supervisory cooperation with a view to promote responsible innovation globally.”

In addition, participants discussed various topics, including those related to third-party providers; climate-related financial risks and challenges, including sustainability reporting standards; the transition from LIBOR; and progress made in strengthening their respective AML/CFT frameworks.

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