November 5, 2025
European asset managers are increasingly affected by the extraterritorial reach of U.S. financial regulation, particularly in areas such as digital assets and ESG, as the EU pares back elements of its regulatory agenda. Market participants describe a shift away from the long-standing “Brussels effect” toward a growing “Washington effect,” with U.S. policy exerting greater global influence. Michael Pedroni of Highland Global Advisors observes that U.S. regulatory reforms—especially in crypto markets—are reshaping capital flows and cross-border operating strategies.