The Securities Industry and Financial Markets Association, Wall Street's biggest lobbying group, in a letter dated 1st March, said that liberalization of trade in financial services "is often incorrectly equated with deregulation". In separate letters on the EU and Asia-Pacific pacts they have urged to draft rules limiting what regulators can do in the name of protecting financial stability. The coalition has also urged that the agreements should limit any rules that can go beyond the borders of the U.S., like the rules about financial derivatives.
The Dodd Frank Act
The Dodd Frank Wall Street Reform and Consumer Protection Act was signed into federal law by President Obama on 21st July, 2010. This was the largest financial regulation overhaul since the 1930's. The law is named after its democratic sponsors in congress, Senator Chris Dodd and Representative Barney Frank. The law is aimed at preventing a repeat of 2008 financial crisis. The act which spans 2000 pages contains rules and regulations for banks, hedge funds and complex financial transactions called derivatives.
Precedence over Legislation
In the words of Mac Destler, professor at the University of Maryland who studies the politics of trade policy viewed "the negotiators could include provisions in the trade agreement that do less than simply reverse the existing legislation'. For example they could include deals to consult in the future where rules on finance conflict, or declare that current regulations are grandfathered to a trade pact".