On Wednesday, February 8, Chris Brummer, a Milken Institute senior fellow and Georgetown University law professor, testified before the House Financial Services Committee, Subcommittee on Capital Markets and Government Sponsored Entities. He had been asked to examine the proposed legislation aimed at minimizing potential regulatory conflicts that may occur when American regulations are applied to dealings involving foreign participants.

His testimony concluded that The Swap Jurisdiction Certainty Act embraces the worthy objective of improving certainty, efficiency and competitiveness in the cross-border derivatives market. However, the breadth of the proposed carve out would profoundly increase the potential vulnerability of U.S. financial institutions to regulatory lapses abroad. Instead, a more narrowly tailored exemption or mutual recognition program would be needed to engage regulatory partners and facilitate cross-border financial transactions.

Brummer's written testimony can be found here.

The webcast of the hearing is a download and can be found by clicking here.