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Abstract
Principles are the backstop of the law. They stop schemes that frustrate the spirit of legislation Former chairman of the FSA Howard Davies says US lawyers must encourage a move toward principles-based regulation. Speaking ahead of his talk at the American Bar Association's conference in London at the beginning of October, Davies says that lawyers are part of New York's competitiveness problem, but that they can be part of the solution. London wins on regulation. People adversely contrast New York and London on approachability. There is a feeling that US authorities are harder to approach and more suspicious. They are less user-friendly. Davies's comments come as the financial press reports that Washington lobby group the Financial Services Roundtable is set to urge US regulators to adopt principles-based regulation. Financial regulation specialists, however, feel the concentration on principles-based regulation is misleading and that, in any case, the idea that US regulation is entirely rules-based and that the UK is free to have recourse to general principle is false. In reality, people in the US who feel the system has become more cumbersome than they would like are using principles as a synonym for reform.