Between power and purpose: central bankers and the politics of regulatory convergence

Abstract

In the early 1980s, when the debt crisis threatened to disrupt the pattern of trade and investment flows that had evolved since the end of World War II, central bankers faced the challenge of maintaining public confidence in the commercial banks that were at the heart of the international payments system. Although the central bankers agreed that a run on one international bank could lead to a global catastrophe requiring massive government intervention, they did not initially agree on a policy project to strengthen the international payments system. In analyzing central bank cooperation and the processes leading to the adoption of a single international capital adequacy standard, this article argues that agreement on a uniform standard was due to a combination of political power and shared purpose on the part of the United States and Britain. While the article does not argue that the central bankers were an epistemic community as defined in this issue, it further explores the conditions under which epistemic communities are likely to arise.

Instrument constituencies and epistemic community theory

“…A third possibility is that the EC may play its significant policy role, but while operating in a nascent/diminishing or partial state (Haas, 1992a, pp. 31-32;Kapstein, 1992). An EC can transform into an IC over time if the progression of knowledge no longer is central, focused instead on supporting a preferred policy instrument in the governing process.…”

“…Although he finds no fully-fledged EC, Kapstein (1992) stresses that the reflection period after an instrument choice is an auspicious time for assessing the values and thinking behind the instrument, as the instrument and its constituents deal with the implementation aftermath (including the potential for crises). In their analysis of biobanks and bioethics, Salter and Jones (2005) reveal how the rising policy and political value of biobanks has created a feedback process where the model of bioethics has been challenged by growing concerns such as citizenship rights over the biodata.…”

Brave New World? Macro-prudential policy and the new political economy of the federal reserve

“…Effective implementation of MPP, however, would mean requiring banks to take costly precautions against risk. Thus an important question is whether an "ideational" attachment to MPP, within the Fed, in Congress, and among the wider "epistemic community" of specialists, is sufficient to ensure the Fed's autonomy in this new mandate (Haas, 1992, see also Kapstein, 1992). I turn, next, to the determinants of agency autonomy and their role in the Volcker Revolution.…”

On the Interconnectedness of Regulatory Policy and Markets: Lessons from Banking

“…More generically, with reference to political and economic interests and power they have thus tried to explain when and why states succeed in imposing national and/or international regulation in open global markets where many observers expect fierce competition among firms to undermine regulatory efforts. Kapstein (1989Kapstein ( , 1992Kapstein ( , 1994 focuses on the influence of knowledge and power (see also Strange, 1998 andPorter, 1993).…”