Hostname: page-component-586b7cd67f-2plfb Total loading time: 0 Render date: 2024-11-24T06:44:40.687Z Has data issue: false hasContentIssue false
  • English
  • Français

Multilevel regulatory governance: Establishing bank-regulator relationships at the European Banking Authority

Published online by Cambridge University Press:  10 October 2019

David Coen  and
John-Paul Salter Open the ORCID record for John-Paul Salter [Opens in a new window]
Get access Rights & Permissions [Opens in a new window]

Abstract

Following the 2007–9 financial crisis, the EU strengthened its institutional apparatus for bank regulation, creating a trio of sectoral bodies, including the European Banking Authority (EBA). Various aspects of this new system have been studied, but to date, little is known about how banks engage with their new supranational regulator. We argue that such engagement fosters an interdependence between banks and regulators, thus contributing to the efficiency and robustness of the overall regulatory regime; but also that it is contingent on the regulator exhibiting the qualities of credibility, legitimacy, and transparency. These qualities are grounded in the domestic regulatory governance literature, but we suggest that they are rendered problematic by the complexities of the EU's multilevel system and, in particular, the overlap in competences between the EBA and the European Central Bank. We examine the EBA in the light of these criteria and find that banks’ engagement remains pitched towards established national regulators and the EU's legislative arena. This poses concerns for the efficacy of agency governance in the EU's regulatory regime for banking.

Keywords

regulatory governanceEuropean Banking Authorityfirm-regulator relationslobbyingvenue shopping
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. 113 - 134
Copyright
Copyright © V.K. Aggarwal 2019 and published under exclusive license to Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

AFME. 2013. Response to the EU Commission consultation on the review of the European System of Financial Supervision, 1–33.Google Scholar
Arras, Sarah, and Braun, Caelesta. 2018. “Stakeholders wanted! Why and how European Union agencies involve non-state stakeholders.” 25 (9): 1257–75.Google Scholar
BaFin. 2011. Annual Report—2010. Frankfurt am Main: BaFin.Google Scholar
BaFin. 2016. Annual Report—2015, 1–292, Frankfurt am Main: BaFin.Google Scholar
Black, Julia. 2002. “Critical reflections on regulation.” Australian Journal of Legal Philosophy 27: 1–36.Google Scholar
Blauberger, Michael, and Rittberger, Berthold. 2014. “Conceptualizing and theorizing EU regulatory networks.” Regulation & Governance 9 (4): 367–76.CrossRefGoogle Scholar
Bovens, Mark. 2007. “New Forms of Accountability and EU-Governance.” Comparative European Politics 5 (1): 104–20.CrossRefGoogle Scholar
Bovens, Mark. 2010. “Two Concepts of Accountability: Accountability as a Virtue and as a Mechanism.” West European Politics 33 (5): 946–67.CrossRefGoogle Scholar
British Bankers' Association. 2013. Consultation on the Review of the European System of Financial Supervision, 1–10.Google Scholar
Buckley, James, Howarth, David, and Quaglia, Lucia. 2012. “Internal Market: The Ongoing Struggle to ‘Protect’ Europe from Its Money Men.” Journal of Common Market Studies 50 (Annual Review): 99–115.CrossRefGoogle Scholar
Buess, Michael. 2014. “European Union agencies and their management boards: an assessment of accountability and demoi-cratic legitimacy.” Journal of European Public Policy 22 (1): 94–111.CrossRefGoogle Scholar
Busuioc, E. Madalina, and Lodge, Martin. 2015. “The Reputational Basis of Public Accountability.” Governance 29 (2): 247–63.CrossRefGoogle Scholar
Busuioc, Madalina, Groenleer, Martijn, and Trondal, Jarle (eds.). 2012. The agency phenomenon in the European Union: Emergence, institutionalisation and everyday decision-making. Manchester, United Kingdom: Manchester University Press.Google Scholar
Coen, David. 2005. “Business–Regulatory Relations: Learning to Play Regulatory Games in European Utility Markets.” Governance: An International Journal of Policy, Administration, and Institutions 18 (3): 375–98.CrossRefGoogle Scholar
Coen, David, Guidi, Mattia, Yordanova, Nikoleta and Héritier, Adrienne. 2019. “The logic of regulatory venue shopping: a firm's perspective.” Public Policy and Administration: 1–35, early view.Google Scholar
Coen, David, and Héritier, Adrienne (eds.). 2005. Refining Regulatory Regimes: Utilities in Europe. Cheltenham, United Kingdom: Edward Elgar.CrossRefGoogle Scholar
Coen, David, and Thatcher, Mark. 2008. “Network Governance and Multilevel Delegation: European Networks of Regulatory Agencies.” Journal of Public Policy 28 (01): 49–71.CrossRefGoogle Scholar
Coen, David, and Vannoni, Matia. 2018. “The Strategic Management of Government Affairs in Brussels.” Business & Society: 1–30, early view.Google Scholar
Davies, Howard, and Green, David. 2008. Global Financial Regulation: The Essential Guide. Cambridge, United Kingdom: Polity Press.Google Scholar
de Larosière, Jacques. 2009. The High-Level Group on Financial Supervision in the EU, 1–86. Brussels.Google Scholar
Dehousse, Renaud. 2008. “Delegation of powers in the European union: The need for a multi-principals model.” West European Politics 31 (4): 789–805.CrossRefGoogle Scholar
Demarigny, Fabrice, McMahon, Jonathan, and Robert, Nicolas. 2013. “Review of the New European System of Financial Supervision (ESFS), Part 1: The Work of the European Supervisory Authorities (EBA, EIOPA and ESMA).” European Parliament: Monetary Affairs, 1–160.Google Scholar
Deutsche Bank. 2017. 1–14 DB final response ESAs consultation.Google Scholar
Deutsche Bank. 2013. 1–14 DB Response to European Commission consultation paper on the ESFS.Google Scholar
Dudley, Susan E, and Wegrich, Kai. 2016. “The role of transparency in regulatory governance: comparing US and EU regulatory systems.” Journal of Risk Research: 1–16.Google Scholar
Epstein, David, and O'Halloran, Sharyn. 1999. Delegating Powers. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
European Banking Authority. 2017. Annual Report 2016. Publications Office of the European Union, 1–124.Google Scholar
European Commission. 2014. Report from the Commission to the European Parliament and The Council on the operation of the European Supervisory Authorities, 1–14.Google Scholar
German Banking Industry Committee. 2017. Public consultation on the operations of the European Supervisory Authorities, 1–7.Google Scholar
Gren, Jakub, Howarth, David, and Quaglia, Lucia. 2015. “Supranational Banking Supervision in Europe: The Construction of a Credible Watchdog.” JCMS: Journal of Common Market Studies 53 (2): 181–99.Google Scholar
Getz, Kathleen. 1997. “Research in Corporate Political Action; Integration and Assessment.” Business & Society 36: 32–72.CrossRefGoogle Scholar
Grimmelikhuijsen, Stephan G, and Meijer, Albert J. 2013. “Effects of Transparency on the Perceived Trustworthiness of a Government Organization: Evidence from an Online Experiment.” Journal of Public Administration Research and Theory 24 (1): 137–57.CrossRefGoogle Scholar
Guidi, Mattia. 2015. “The Impact of Independence on Regulatory Outcomes: the Case of EU Competition Policy.” JCMS: Journal of Common Market Studies 53 (6): 1195–213.Google Scholar
Hanretty, Chris, and Koop, Christel. 2012. “Measuring the formal independence of regulatory agencies.” 19 (2): 198–216.Google Scholar
Héritier, Adrienne, and Lehmkuhl, Dirk. 2008. “The Shadow of Hierarchy and new modes of governance.” Journal of Public Policy 28 (1): 1–17.CrossRefGoogle Scholar
Hillman, Amy, Keim, Gerald, and Schuler, Douglas. 2004. “Corporate Political Action: A Review and Research Agenda.” Journal of Management 30: 837–57.CrossRefGoogle Scholar
Hood, Christopher. 2010. “Accountability and Transparency: Siamese Twins, Matching Parts, Awkward Couple?” West European Politics 33 (5): 989–1009.CrossRefGoogle Scholar
Hood, Christopher, Rothstein, Henry, and Baldwin, Robert. 2001. The Government of Risk: Understanding Risk Regulation Regimes. Oxford: Oxford University Press.CrossRefGoogle Scholar
Kelemen, R. Daniel, and Tarrant, Andrew D.. 2011. “The Political Foundations of the Eurocracy.” West European Politics 34 (5): 922–47.CrossRefGoogle Scholar
Koop, Christel. 2014. “Theorizing and Explaining Voluntary Accountability.” Public Administration 92 (3).Google Scholar
Koop, Christel, and Hanretty, Chris. 2017. “Political Independence, Accountability, and the Quality of Regulatory Decision-Making.” Comparative Political Studies: 1–38.Google Scholar
Levi-Faur, David. 2011. “Regulatory networks and regulatory agencification: towards a Single European Regulatory Space.” 18 (6): 810–29.CrossRefGoogle Scholar
Lodge, Martin. 2004. “Accountability and transparency in regulation: Critiques, doctrines and instruments.” In The Politics of Regulation, eds. Jordana, Jacint and Levi-Faur, David. Cheltenham.Google Scholar
Lombardi, Domenico, and Moschella, Manuela. 2016. “Domestic preferences and European banking supervision: Germany, Italy and the Single Supervisory Mechanism.” West European Politics 39 (3): 462–82.CrossRefGoogle Scholar
Maggetti, Martino, and Gilardi, Fabrizio. 2014. “Network governance and the domestic adoption of soft rules.” 21 (9): 1293–310.Google Scholar
Marks, Gary, and Hooghe, Liesbet. 2001. Multilevel Governance and European Integration. Lanham: Rowman and Littlefield.Google Scholar
Mazey, Sonia, and Richardson, Jeremy J.. 2015. “Shooting where the ducks are: EU lobbying and institutionalised promiscuity.” In European Union: Power and Policy-Making, edited by J, Jeremy. Richardson and Sonia Mazey. Oxford: Routledge.Google Scholar
McCubbins, Mathew D., Noll, Roger G., and Weingast, Barry R.. 1987. “Administrative Procedures as Instruments of Political Control.” Journal of Law, Economics, and Organisation 3 (2): 243–77.Google Scholar
Norddeutsche Landesbank. 2012. 1–5 Response to EBA Consultation Paper on Supervisory Reporting.Google Scholar
Pfeffer, Jeffrey, and Salancik, Gerald A.. 1978. The External Control of Organizations: A Resource Dependence Perspective. New York: Harper and Row.Google Scholar
Prudential Regulatory Authority. 2015. Annual Report and Accounts 2015, 1–94.Google Scholar
Quaglia, Lucia. 2013. “Financial regulation and supervision in the European Union after the crisis.” Journal of Economic Policy Reform 16 (1): 17–30.CrossRefGoogle Scholar
Quaglia, Lucia. 2008. “Financial Sector Committee Governance in the European Union.” Journal of European Integration 30 (4): 563–78.CrossRefGoogle Scholar
Sabel, Charles F., and Zeitlin, Jonathan (eds.). 2010. Experimentalist Governance in the European Union: Towards a New Architecture. Oxford: Oxford University Press.Google Scholar
Scharpf, Fritz W. 2009. “Legitimacy in the multilevel European polity.” European Political Science Review 1 (2): 173–204.CrossRefGoogle Scholar
Scott, Colin. 2000. “Accountability in the Regulatory State.” Journal of Law and Society 27: 38–60.CrossRefGoogle Scholar
Spendzharova, Aneta B. 2014. “Banking union under construction: The impact of foreign ownership and domestic bank internationalization on European Union member-states’ regulatory preferences in banking supervision.” Review of International Political Economy 21 (4): 949–79.CrossRefGoogle Scholar
Stern, John. 2010. “The Evaluation of Regulatory Agencies.” In Oxford Handbook of Regulation, edited by Baldwin, Robert, Cave, Martin, and Lodge, Martin. Oxford: Oxford University Press.Google Scholar
Tarrant, Andrew, and Kelemen, R Daniel. 2017. “Reconceptualizing European Union regulatory networks: A response to Blauberger and Rittberger.” Regulation & Governance 11 (2): 213–22.CrossRefGoogle Scholar
Thatcher, Mark. 2002. “Regulation after delegation: independent regulatory agencies in Europe.” Journal of European Public Policy 9 (6): 954–72.CrossRefGoogle Scholar
Thatcher, Mark. 2011. “The creation of European regulatory agencies and its limits: a comparative analysis of European delegation.” 18 (6): 790–809.Google Scholar
Thatcher, Mark, and Sweet, Alec Stone. 2002. “Theory and practice of delegation to non-majoritarian institutions.” West European Politics 25 (1): 1–22.CrossRefGoogle Scholar
Thatcher, Mark, and Coen, David. 2008. “Reshaping European regulatory space: An evolutionary analysis.” West European Politics 31 (4): 806–36.CrossRefGoogle Scholar
Westrup, Jonathan. 2007. “The Politics of Financial Regulatory Reform in Britain and Germany.” West European Politics 30 (5): 1096–119.CrossRefGoogle Scholar
Willman, Paul et al. 2003. “The evolution of regulatory relationships; regulatory institutions and firm behaviour in privatized industries.” Industrial and Corporate Change 12 (1): 69–89.CrossRefGoogle Scholar
Zimmermann, Hubert. 2012. “No Country for the Market: The Regulation of Finance in Germany after the Crisis.” German Politics 21 (4): 484–501.CrossRefGoogle Scholar