Magazine article American Banker

U.S. Resumes Effort to Liberalize Trade in Financial Services Worldwide

Magazine article American Banker

U.S. Resumes Effort to Liberalize Trade in Financial Services Worldwide

Article excerpt

Seventeen months after a round of talks on liberalizing trade in financial services failed to produce results, the Clinton administration remains determined to open new overseas markets for U.S. banks.

In a letter recently sent to finance ministers of countries currently participating in a second round of World Trade Organization talks in Geneva, Treasury Secretary Robert E. Rubin stated that the United States won't water down demands that developing countries open their financial markets to free competition.

No agreement will be successful, Mr. Rubin warned, unless banks and other financial institutions are able "to establish and operate in the form of their choice, including branches."

The letter added that financial institutions seeking to enter new markets must also be allowed to have majority control over the entities they establish and enjoy the same rights as local financial institutions.

U.S. banks have been keen to enter emerging markets in Asia, Eastern Europe, and Latin America. Many of these markets, however, continue to closely restrict the entry of foreign banks or the scope of their activities.

Discussions by the World Trade Organization, the international association that regulates world trade, on a worldwide agreement on liberalizing entry into local financial markets resumed in Geneva last month. A previous round of talks ended in December 1995 without any results after most developing countries declined to allow banks from the United States and other industrialized countries greater access to their local markets. …

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