Network effects in the formation of the financial industry's regulatory preferences in the European Union

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.

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“…77 Montalbano (2020). 78 Chalmers and Young (2020). See also James and Christopoulos (2018); Tsingou (2015).…”

Section: Critical Approaches To the Statementioning

confidence: 99%

Bank power and public policy since the financial crisis

Macartney¹,

Howarth²,

James³

2020

Bus. Polit.

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“…Since this article is concerned with hard law preferences, only proposals for EU directives and regulations were included. Furthermore, to avoid capturing proposals with limited lobbying activities and little public conflict, 71 Measuring policy preference in terms of regulatory stringency allows for general measure, however, it is important to note that it washes out nuances, as is discussed in Chalmers and Young (2020).…”

Section: Intereuro Samplementioning

confidence: 99%

“… 71 Measuring policy preference in terms of regulatory stringency allows for general measure, however, it is important to note that it washes out nuances, as is discussed in Chalmers and Young (2020). …”

mentioning

confidence: 99%

Soft Law Engagements and Hard Law Preferences: Comparing EU Lobbying Positions between UN Global Compact Signatory Firms and Other Interest Group Types

Broek¹

2021

Bus. Polit.

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Although corporate social responsibility (CSR) has gone “mainstream,” the relationship between CSR and corporate political activities (CPA) has received little scholarly attention. This is problematic because firms potentially have a more sizable impact through their lobbying activities for socially and environmentally beneficial (or unbeneficial) public policies than through their own operations. This paper investigates if, and how, UN Global Compact signatory firms differ in their policy preferences on key EU proposals compared to other interest groups. To capture state-of-the-art data on firms’ policy preferences, I draw from the INTEREURO database, which includes firms’ lobbying positions on forty-three directives and twenty-seven regulations covering 112 public policy issues in the European Union. Statistical results show that Global Compact signatory firms significantly lobby for stricter regulation than non-signatory firms and industry associations, however, their positions are still lower than nonbusiness groups. These results are similar across various public policy issues and suggest that the regulatory preferences of firms’ participating in soft law CSR initiatives are more aligned with stakeholders' interests. This paper contributes to public policy literature exploring the relationship between hard and soft law as well as literature studying the political representation of divergent interest.

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“…79 In this respect, the political economy faces a rich diversity of regulatory issues around stablecoins. Here, we again see political design features of these digital currencies playing an important role in the 72 Hobbs, 2021. 73 Kim, 2021. 74 Young et al, 2017;Chalmers and Young, 2020;Yackee, 2019. 75 Kaufman, 2014;Barth et al, 2012;Moosa, 2010. 76 Young, 2012;Broz, 2015. unfolding political conflict and still unresolved regulatory responses. In this case, stablecoins leverage a combination of new value backing-often in the form of algorithmically balanced prices-and ledger technology to improve on the previous technology of payment instruments.…”

Section: Firms Corporate Governance and Supply Mechanismsmentioning

confidence: 99%

Bigger than Bitcoin: A Theoretical Typology and Research Agenda for Digital Currencies

Marple¹

2021

Bus. Polit.

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Currency is the fundamental economic technology that makes promises credible among actors within and across societies. From shells, to metals, to paper, the technology of money has continually evolved to meet the changing needs of human society. The twenty-first century is witnessing yet another evolution in the technology of money: digital currencies. Although political economy scholarship has begun to focus on digital currencies, this research has largely focused on single early examples like Bitcoin. I argue that this generally narrow focus has obscured important degrees of variation among digital currencies and, by extension, has omitted important lines of research on digital currencies as a familiar evolution in the technology of money. In this article, I revisit the history of digital currencies with explicit attention to not only economic inefficiencies but also political power structures and offer a new typology for theoretically organizing digital currencies along dimensions relevant to practitioners of political economy. I illustrate that variation along these typological dimensions produces important differences among different digital currencies and, relatedly, I explore the implications this has for digital currencies’ externalities and governance demands. Drawing on this typology, I conclude with a proposed research agenda for the political economy of digital currencies.

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Network effects in the formation of the financial industry's regulatory preferences in the European Union

Cited by 11 publications

References 103 publications

Bank power and public policy since the financial crisis

Bank power and public policy since the financial crisis

Soft Law Engagements and Hard Law Preferences: Comparing EU Lobbying Positions between UN Global Compact Signatory Firms and Other Interest Group Types

Bigger than Bitcoin: A Theoretical Typology and Research Agenda for Digital Currencies

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