The United States has a highly decentralized structure for regulating financial services companies. Banks and savings and loans are regulated at the state level as well as by four federal agencies; insurance companies are regulated by each of the fifty states; and securities firms now have a single federal securities regulator, but are facing increasing regulation by states. Other developed countries, including the United Kingdom and Japan, have recently consolidated all financial regulatory functions into a single agency, which regulates banking, insurance, and securities. While this would be a radical change for the U.S., a recent development known as product convergence--when banks, insurance companies, and securities firms offer products that compete across industry boundaries--could eventually provide a powerful argument for consolidation: Firms that are competing with one another should not be differentially regulated.

This conference will consider the question of consolidated regulation from the perspectives of the British and Japanese experiences and the prospect that product convergence will continue in the future.