The Political Economy of European Capital Markets Union

in Journal of Common Market Studies (2016), 54(S1), 185203

In September 2015 the European Commission put forward an Action Plan for Capital Markets Union (CMU) and two legislative proposals concerning securitization. Further legislative activity was to follow ... [more ▼]

In September 2015 the European Commission put forward an Action Plan for Capital Markets Union (CMU) and two legislative proposals concerning securitization. Further legislative activity was to follow. This contribution undertakes a preliminary investigation of the ‘making’ of the CMU project, explaining what CMU is, its economic and political objectives, as well as its main drivers and obstacles. It is argued that the likely winners and losers of the project – both financial groups and specific Member State governments – largely formed the constituencies for and against CMU. The organization of national financial (and specifically banking) systems largely directed Member State government preferences on CMU. The potential winners were also influential in promoting a specific form of CMU, or at least specific priorities in the construction of CMU. The centrality of banks in EU national financial systems explains the priority attached to securitization in the first stage of the CMU project. [less ▲]

The Comparative Political Economy of Basel III

E-print/Working paper (2015)

The Basel III Accord was the centerpiece of the international regulatory response to the global financial crisis, setting new capital requirements for internationally active banks. This paper explains the ... [more ▼]

The Basel III Accord was the centerpiece of the international regulatory response to the global financial crisis, setting new capital requirements for internationally active banks. This paper explains the divergent preferences on Basel III of national regulators in three countries that approximate what are frequently presented as distinct varieties of capitalism in Europe – Germany, the United Kingdom and France. It is argued that national regulators faced a ‘trilemma’ in setting capital requirements, having to prioritize among banking sector stability, the competitiveness of national banks and short to medium term economic growth. Different varieties of national financial system – specifically, banking system and different kinds of ‘banking champions’ – explain the different prioritization of objectives in the ‘trilemma’ and hence for the divergent preferences of national regulators on Basel III capital requirements. [less ▲]

The New Intergovernmentalism in Financial Regulation and European Banking Union

in Bickerton, Christopher; Puetter, Uwe; Hodson, Dermot (Eds.) The New Intergovernmentalism States and Supranational Actors in the Post-Maastricht Era (2015)

This contribution asks whether a new type of intergovernmentalism has emerged in financial services regulation and Banking Union. Since financial services are a key area of the single market, the chapter ... [more ▼]

This contribution asks whether a new type of intergovernmentalism has emerged in financial services regulation and Banking Union. Since financial services are a key area of the single market, the chapter concludes by reflecting on whether the governance trends in the financial sector can be generalised to other areas of the single market. It is argued that the single market for financial services, which encompasses financial regulation and the plan for Banking Union, provides an interesting mix of 'old' (community) method and 'new' intergovernmentalism. [less ▲]

Hedge Funds

in Mügge, Daniel (Ed.) Europe and the Governance of Global Finance (2014)

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 ▲]