Banking Regulation and World Trade Law: GATS, EU and Prudential Institution Building

Banking Regulation and World Trade Law concerns the legal aspects of the interaction between banking regulation and international trade in financial services. The author studies the internal banking market of the European Union, the liberalisation of financial services trade in the World Trade Organization, the accords of the Basel Committee on Banking Supervision and the European Central Bank. The book focuses on the balancing between banking regulation and international trade law. It discusses discrimination and proportionality in national banking regulation, the allocation of prudential regulation and supervision between home and host country, and international financial law-making. The author questions decentralised/nation-based banking regulation and supervision as a foundation for a sustainable liberalisation of international trade in financial services. The book considers various reforms of the international financial architecture, such as the incorporation of the Basel processes and accords into the WTO system, and the setting up of new international institutions by building on the Basel Committees or the IMF structures. The role of central banking in designing the international financial architecture is also explored: the book reviews the ECB's competence over foreign exchange policy and its function as lender of last resort, and treats price stability, banking soundness and representation as critical concepts. The analysis also reveals that the concept of 'prudential', despite its extensive use in banking regulation, has not been defined with adequate precision. In seeking to delineate the interface between international economic law and banking regulation, Dr Panourgias builds on the rich European scholarship on institutional financial issues and the US interdisciplinary approach to world trade law. He also entertains the notion of international financial law as a distinct field. The book will be of particular interest to those concerned with financial law and international banking.

Table of Contents:
I. Introduction 1. The concept of 'prudential' 1.1. The concept of 'prudential' in the GATS and the EU 1.2. The concept of 'prudential' in the literature 1.3. The problem 2. Relevant Policy rationales 2.1. Banking regulation - rationale 2.2. The conflict between banking regulation and trade liberalization II. Trade Liberalization and Banking Regulation: The GATS and The EU 1. Liberalization of cross-border banking 1.1. Foreign direct investment (FDI) and International cooperation 1.2. FDI in banking 2. Trade liberalization and Banking regulation 2.1. Regional liberalization - European Union (EU) 2.2. Multilateral liberalization - General Agreement on Trade in Services (GATS) 3. GATS: Trade and Financial stability 3.1. Branch 3.2. Subsidiary 3.3. Non-financial entity 4. Trade and Financial stability - review of the EU and GATS institutional foundations: Lessons for the GATS 4.1. Trade and financial stability output 4.2. Trade and Financial stability - review of the EU and GATS institutional foundations 4.3. Trade and financial stability - regional integration 5. Conclusions III. The Case for Prudential Supervision at the International Level and Related Reforms 1. GATS Reform 1.1. Definition of the prudential carve-out - Development of the trade-off devices 1.2. Incorporation of the Basel standards 2. Prudential institution building at the international level 2.1. Decentralization model 2.2. Medium-term institutional arrangements 2.3. Prudential institution building at the international level - Long-term institutional arrangements 3. Conclusions IV. EC Internal Banking Market and Prudential Supervision 1. Banking supervision: the decentralization model 1.1. Decentralization 1.2. Cooperation 1.3. European Central Bank (ECB) 1.4. Reform 2. Monetary policy and Bank supervision 2.1. Price stability 2.2. Default prudential supervision of central banks 2.3. Monetary policy and bank supervision 2.4. ECB and prudential supervision 2.5. ECB and Foreign exchange policy 3. Lender of Last Resort 3.1. Accountability 4. The EC internal banking market and lessons for regional integration 5. Conclusions V. Conclusions - Toward International Institution Buiilding 1. GATS 1.1. Balancing of trade and banking regulation 1.2. Trade and financial stability output 1.3. Reliance on adjudication 1.4. GATS vis-à-vis EU: macro-aspects 1.5. Reform 2. Prudential institution building at the international level 2.1. Alternatives 2.2. Informal vis-à-vis Formal norm making 2.3. Forum 3. EC Internal banking market 3.1. The case for bank supervision at the Community level 3.2. The EU macro- design 3.3. Prudential supervision at the community level and accountability 4. EC Internal banking market and prudential institution building at the international level

About the Author :
Lazaros E Panourgias LLB (Athens), LLM (Georgetown), MA (Fletcher), Ph D (King's College, London) is an associate at Herbert Smith LLP (Financial Institutions Group) in London. A member of the Bar in Athens and New York, he has previously been affiliated with the British Institute of International and Comparative Law and worked as legal adviser at the European Bank for Reconstruction and Development and at the Harvard Law School Program on International Financial Systems. Dr Panourgias regularly advises financial institutions on financial services issues and is publishing and lecturing on the European and international financial architecture.

Review :
This book is well written, well researched, well argued, and thought provoking. It is also highly topical, and as such is a most valuable contribution to the present debate on the form of regulation that we need for trans-border banking activity and is thus of considerable importance.