BRIEFING PAPER - Financial Instability and the GATS Negotiations - By Ellen Gould

that given the severity of the subprime crisis, new However, in the current round of negotiations the regulations will have to be imposed on the financial bargaining requests specifically related to financial industry. [...] 2 Introduction The Stake of Financial Corporations in the GATS Over the last three decades, some of the world’s largest financial corporations have made promotion of trade Knowing the history of the GATS helps to make agreements a strategic priority. [...] Imposition of address this problem: higher capital requirements, which have been called for in the wake of the sub-prime crisis95, would violate the “We have yet to convince most of the countries Understanding’s requirement that no new conditions of the world, particularly developing countries… be placed on the establishment or expansion of that services are part of the necessary infrastructure fi. [...] Especially competence of a natural person to supply a service, when the disciplines are considered in light of the and which are required to be demonstrated for the extensive restrictions on regulation in the rest of the purpose of obtaining authorization to supply a service.” agreement, it is clear the right to regulate is being In relation to the financial sector, this would cover significantly. [...] The higher the risk, the more capital a bank is The disciplines on domestic regulation as drafted required to have, so the ratings of the agencies have a require that countries ensure their regulations are direct impact on the profitability of companies.