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Bank power and public policy since the financial crisis

Published online by Cambridge University Press:  27 January 2020

Huw Macartney ,
David Howarth Open the ORCID record for David Howarth [Opens in a new window]  and
Scott James
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Abstract

Despite much commentary in the media and the popular assumption that the banking industry exerts undue influence on government policy-making, the academic literature on the role of the banks since the 2008 financial crisis remains theoretically and empirically under-specified. In particular, we argue that different forms of financial power are often conflated, while favorable policy outcomes are too-readily assumed to be evidence of regulatory capture. In short, we still know relatively little about how bank influence varies over time and in different national contexts, the extent to which banking interests are unified or divided, and the conditions under which banks are capable of producing meaningful variation in policy outcomes. This article has three objectives: 1) to explain why the debate on bank influence matters; 2) to examine the evidence of bank influence since the international financial crisis; and 3) to set out a range of conceptual tools for thinking about bank power.

Keywords

bankspublic policyfinancial regulationinterest groupsfinancial crisisregulatory capture
Type
Research Article
Information
Business and Politics , Volume 22 , Special Issue 1: Ten Years of Regulatory Reform Since the International Financial Crisis: Understanding Bank Influence in the European and International Context , March 2020 , pp. 1 - 24
Copyright
Copyright © V.K. Aggarwal 2020 and published under exclusive license to Cambridge University Press

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