European Union Commissioner for Internal Market and Services, Charlie McCreevy, called for light-touch regulation that allows firms to determine the development of capital markets.

Speaking at the Benjamin N. Cardozo School of Law/Yeshiva University, McCreevy discussed the building of transatlantic marketplaces and the role regulators should play in the expansion of global markets. He also explained his role in the NYSE/Euronext merger, noting he was pressed by some in Europe to block the transatlantic deal in favour of creating a European-based competitor.

“I rejected this approach then and I continue to reject it now. Not because I favour one business model over another, but because I believe that such issues are for the markets and shareholders to decide, not for politicians,” he said.

“Regulators have a duty to ensure that the terms of any deal are consistent with anti-trust regulations, securities laws and with the public interest. But they should stay out of determining what constitutes best value in any particular case,” he said. “They should avoid falling prey to the wishy-washy nonsense of notions of economic security that are peddled both here and in Europe.”

Noting that other mergers or similar deals were likely to follow, McCreevy offered six principles for building a transatlantic market, suggesting to policymakers, “We should get rid of as much regulatory duplication as possible. If another regulator offers an equivalent standard of regulation and equivalent enforcement — have the courage to rely on them.”

The Securities Industry and Financial Markets Association co-hosted the speech. “Commissioner McCreevy and global financial firms are on the same page when it comes to the best approach to the regulation of financial markets,” said SIFMA co-CEO Micah Green. “We should all be working towards the elimination of duplicative and inefficient regulations and moving toward rules that take a risk-based, or principles-based, approach.”