The Ongoing Struggle to 'Protect' Europe from its Money Men

in Journal of Common Market Studies (2012), 50(s1), 99-115

This analysis of two of the main pieces of EU financial legislation developed in 2011 demonstrates the extent to which they were designed and subsequently shaped to respond to the preoccupations of ... [more ▼]

This analysis of two of the main pieces of EU financial legislation developed in 2011 demonstrates the extent to which they were designed and subsequently shaped to respond to the preoccupations of powerful EU member states linked to domestic institutional frameworks and national financial systems. On OTC derivatives, EMIR was modified to accommodate German concerns about the incompatibility of the national stock exchange, a major European player in trading and clearing derivatives, with the legislation as initially drafted by the Commission. The CRDIV-CRR was drafted by the Commission to take into consideration European specificities in the implementation of international guidelines on capital requirements and, in particular, French and German concerns on, respectively, the double counting of insurance subsidiary capital and the use of hybrid capital to meet minimum capital thresholds and the definition of liquidity ratios. The Commission’s draft and subsequent positioning directly challenged British and other member state government preference to push for higher requirements in order to reinforce the stability of nationally-based banks and avoid a repeat of 2007-09 when huge amounts of public money were spent to avoid bank collapse. [less ▲]

Gesture Politics?: explaining financial regulatory reform in the European Union

in Journal of Common Market Studies (2010), 48(s1), 119-141

We accept the insights from several distinct analytical approaches to explain national policy-making and EU-level policy. We apply systemic realism and an approach focused upon interest group preferences ... [more ▼]

We accept the insights from several distinct analytical approaches to explain national policy-making and EU-level policy. We apply systemic realism and an approach focused upon interest group preferences. We also accept the usefulness of insights drawn from comparative political economy (CPE). We agree with CPE approaches to the extent that they insist that government policies seek to protect national political economies (as in Quaglia, forthcoming). However, we also warn against a CPE approach that relies upon a stagnant understanding of Varieties of Capitalism (VoC) (Hall and Soskice, 2001) because such an approach ignores significant changes that have taken place in European financial systems and capitalisms over the past decade (Hancké et al., 2007). We argue that to understand fully the lack of developments on banking regulation at the EU level and EU-level policy co-ordination on international regulation, it is necessary to incorporate other insights, notably from international policy economy (IPE), into an understanding of how national financial systems and economic interests shape national policy. We cannot divorce this study of EU-level responses to the financial crisis from considerations of the obstacles facing financial market integration in the EU. Clearly, support for integration shaped national policymaking on EU-level developments on financial sector matters. However, we argue that integration considerations were secondary. Our focus upon the Member States with the three largest economies and financial sectors – Germany, France and the UK – and the influence of the positions of the financial interests in these countries corresponds to a Liberal Intergovernmentalist (LI) analysis. However, we do not seek to draw broader conclusions about the applicability of LI to explain developments in this policy area. [less ▲]