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Fratto: Two Factors Are Driving European Action

First, in early June Europeans will vote to elect members of the European Parliament, and having a record of slaying financial dragons helps on the campaign trail. The election calendar makes getting something - anything - done before June an imperative.

Second - as seen at the recent G-20 Summit- European officials are consumed by the view that the financial crisis is American born and bred, and they are loathe to wait for American solutions.

Where in the past Europe would have sought better coordination with U.S. regulators, today they are intent to take the wheel and drive regulatory reform.

European banking and regulatory officials are well aware of the potential headaches caused by mismatched policies on two sides of the Atlantic. After all, it wasn't long ago that European firms were left to deal with an American fait accompli in the form of Sarbanes-Oxley Actreforms of public company accounting standards.

An additional reason coordination has lagged because of the U.S. Political transition. Officials in Brussels have been waiting to see whether the Obama Administration will continue Bush Administration trans-Atlantic initiatives to streamline regulation and resolve disputes - and for U.S. officials to get in place to implement them.

Officials on both sides of the Atlantic hope the regulatory differences can be bridged over time, but by blazing the trail first and with hardened emotions, Europe is attempting to put itself in a stronger position.

Reform efforts always tend to realign competitive advantages - that's their nature. Uncoordinated policies and the European approach are posing significant risks for U.S. financial firms, and since major reforms tend to only occur in the light of crisis, those policies could be with us for a long time.

While regulatory reform legislation in the U.S. will appropriately take time, now is the time to engage Europe and bring shared goals of preventing the next crisis into alignment.

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Tony Fratto is a CNBC on-air contributor and most recently served as Deputy Assistant to the President and Deputy Press Secretary for the Bush Administration.