By Douwe Miedema
WASHINGTON (Reuters) - U.S. and European Union regulators on Friday pledged to work more closely together on reforming the $630 trillion (382.79 trillion pounds) derivatives market after publicly locking horns over the issue last year.
In a briefing after bilateral talks in Washington on Thursday, the EU and the U.S. Treasury Department also said they were concerned about the lack of progress in putting accounting standards on an equal footing.
"When new initiatives are finalized by either jurisdiction, staff (at regulators) will seek to reach consensus in as many areas as possible," they said in a joint statement on derivatives.
The EU and the United States are putting into effect a host of measures to reform the financial industry following the financial crisis of 2007-09 - the worst since the Great Depression and costing taxpayers billions of dollars.
World leaders of the G20 group of the most powerful countries agreed on the changes at a summit in 2009, but individual countries are only putting the first measures in place now, and have squabbled about how to interpret them.
A top issue to be solved this year is how to wind down any large international bank that gets into trouble without using taxpayer money, the statement said.
The United States has set up a mechanism to deal with that issue. But Europe's plans for such a troubled bank resolution authority are lagging behind, making it unclear what would happen if a bank collapse affects both jurisdictions.
The U.S. derivatives regulator - the Commodity Futures Trading Commission - in December issued measures requiring foreign banks to comply with U.S. laws when dealing with U.S. clients or when doing business from U.S. offices.
There were some exemptions. But the need for foreign banks to comply with the cross-border rules for data reporting, swaps trading, and for clearing trades has upset European regulators, who are seeking greater reliance on their own rules.
Europe is now pushing for financial regulation to be part of U.S.-European trade talks, to create a structure to prevent such disputes. But the U.S. side opposes that plan.
"The United States reiterated that financial regulatory cooperation should continue separately in existing global and bilateral fora," the statement said.
Treasury Secretary Jack Lew in December defended the strict U.S. stance on regulation, saying he would "press other jurisdictions to match our robust standards" and would not allow trade talks to water down regulation.
The next such meeting will take place in Brussels in July when the two sides will also take stock of the convergence of accounting standards.
(Reporting by Douwe Miedema; Editing by Jonathan Oatis)