ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

B K ZutshiSubscribe to B K Zutshi

Regulatory Freedom under GATS: Financial Services Sector

The 2008 financial crisis and the rescue of big firms, costing trillions of dollars to taxpayers, has created a strong global push for the restructuring and re-regulating of big banks and financial firms. This has produced two reactions: on the one side, heavy lobbying by banking and financial firms to block reforms and weaken enforcement. On the other side, a campaign by some northern NGOS, one or two members of the World Trade Organisation, and the latest by the United Nations Conference on Trade and Development, about the General Agreement on Trade in Services posing impediments for reform and the need for rule changes to overcome them. This paper finds the campaign to change GATS misguided and meritless. The GATS provides near-total freedom to regulate the financial services sector for prudential reasons and to ensure the integrity and stability of the financial system. The changes being proposed will be against developing country interests, mess up the GATS and impact its integrity as a viable trade agreement.
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