In the Transatlantic Trade and Investment Partnership (TTIP) negotiations, one point of contention has been the inclusion of financial services regulation. The United States considers itself very competitive in most service areas, and often pushes for more trade liberalization, but in financial services there has been great resistance among some in the U.S. government to open up the U.S. market to competition. Of particular concern is that appropriate "prudential" regulation may not be possible because the typical exceptions for prudential measures in trade and investment agreements do not function very well. This Article argues that concerns about an ineffective prudential exception have been overstated, but nevertheless, improved language in this area could bring certainty and reassure critics that trade liberalization will not undermine domestic regulation.
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