IDEAS home Printed from https://ideas.repec.org/a/pal/jbkreg/v21y2020i4d10.1057_s41261-019-00120-1.html
   My bibliography  Save this article

Banking on burden reduction: how the global financial crisis shaped the political economy of banking regulation

Author

Listed:
  • Mercy B. DeMenno

    (Duke University)

Abstract

The Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) of 1996 requires the Federal Financial Institutions Examination Council—an interagency council composed of US banking regulators—to conduct decennial retrospective reviews of existing banking regulations, with an emphasis on reducing regulatory burden. EGRPRA reviews provide a lens to study the political economy of banking regulation before and after the global financial crisis (GFC) of 2007–2009. Through comparative case studies of EGRPRA reviews in 2007 and 2017, this article documents how ex post impact assessment of banking regulation and stakeholder participation in banking regulatory processes have changed over the last 10 years. Using within-case process tracing and content analysis of an original dataset of government documents and public input, this article analyzes the extent to which changes in review processes, participation, and outcomes can be attributed to the policy shock of the GFC and/or shifting political, regulatory, and/or market contexts. The results suggest that government–market interactions have changed considerably since the GFC and that regulatory politics explain many of these changes. While retrospective review and stakeholder participation therein may enable more effective and legitimate regulations and rulemaking processes, much work remains to realize these potential benefits in banking regulation.

Suggested Citation

  • Mercy B. DeMenno, 2020. "Banking on burden reduction: how the global financial crisis shaped the political economy of banking regulation," Journal of Banking Regulation, Palgrave Macmillan, vol. 21(4), pages 315-342, December.
  • Handle: RePEc:pal:jbkreg:v:21:y:2020:i:4:d:10.1057_s41261-019-00120-1
    DOI: 10.1057/s41261-019-00120-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41261-019-00120-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1057/s41261-019-00120-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Office of Financial Research (ed.), . "Size Alone is Not Sufficient to Identify Systemically Important Banks," Viewpoint Papers, Office of Financial Research, US Department of the Treasury, number 17-04.
    2. Troy A. Davig & Michal Kowalik & Charles S. Morris & Kristen Regehr, 2015. "Bank consolidation and merger activity following the crisis," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 31-49.
    3. Jihad Dagher, 2018. "Regulatory Cycles: Revisiting the Political Economy of Financial Crises," IMF Working Papers 2018/008, International Monetary Fund.
    4. Birkland, Thomas A., 1998. "Focusing Events, Mobilization, and Agenda Setting," Journal of Public Policy, Cambridge University Press, vol. 18(1), pages 53-74, January.
    5. Balla, Steven J., 1998. "Administrative Procedures and Political Control of the Bureaucracy," American Political Science Review, Cambridge University Press, vol. 92(3), pages 663-673, September.
    6. Lutter Randall, 2013. "Regulatory policy: what role for retrospective analysis and review?," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(1), pages 17-38, March.
    7. Jeffrey N. Gordon, 2014. "The Empty Call for Benefit-Cost Analysis in Financial Regulation," The Journal of Legal Studies, University of Chicago Press, vol. 43(S2), pages 351-378.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mercy B. DeMenno, 2019. "Technocracy, democracy, and public policy: An evaluation of public participation in retrospective regulatory review," Regulation & Governance, John Wiley & Sons, vol. 13(3), pages 362-383, September.
    2. Corbae, Dean & D’Erasmo, Pablo, 2020. "Rising bank concentration," Journal of Economic Dynamics and Control, Elsevier, vol. 115(C).
    3. Tobin Im & Kris Hartley, 2019. "Aligning Needs and Capacities to Boost Government Competitiveness," Public Organization Review, Springer, vol. 19(1), pages 119-137, March.
    4. Abigail Sullivan & Dave D. White & Kelli L. Larson & Amber Wutich, 2017. "Towards Water Sensitive Cities in the Colorado River Basin: A Comparative Historical Analysis to Inform Future Urban Water Sustainability Transitions," Sustainability, MDPI, vol. 9(5), pages 1-27, May.
    5. Eric A. Posner & E. Glen Weyl, 2014. "Benefit-Cost Paradigms in Financial Regulation," The Journal of Legal Studies, University of Chicago Press, vol. 43(S2), pages 1-34.
    6. Park, Hyun Woong & Bernardin, Thomas, 2018. "Liquidity, bank runs, and fire sales under local thinking," The North American Journal of Economics and Finance, Elsevier, vol. 46(C), pages 89-102.
    7. Henrik Haller & Anna-Sara Fagerholm & Peter Carlsson & Wilhelm Skoglund & Paul van den Brink & Itai Danielski & Kristina Brink & Murat Mirata & Oskar Englund, 2022. "Towards a Resilient and Resource-Efficient Local Food System Based on Industrial Symbiosis in Härnösand: A Swedish Case Study," Sustainability, MDPI, vol. 14(4), pages 1-17, February.
    8. Foarta, Dana & Morelli, Massimo, 2020. "Equilibrium Reforms and Endogenous Complexity," CEPR Discussion Papers 15136, C.E.P.R. Discussion Papers.
    9. Neomi Frisch-Aviram & Nissim Cohen & Itai Beeri, 2018. "Low-level bureaucrats, local government regimes and policy entrepreneurship," Policy Sciences, Springer;Society of Policy Sciences, vol. 51(1), pages 39-57, March.
    10. Bugarin, M. B., 2007. "Benefit Sharing: An Incentive Mechanism for Social Control of Government Expenditure," Insper Working Papers wpe_77, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    11. André Corrêa d’Almeida & Donald Klingner, 2008. "FEMA and the Witt Revolution: Testing the Hypothesis of “Bureaucratic Autonomy”," Public Organization Review, Springer, vol. 8(4), pages 291-305, December.
    12. Ellig, Jerry, "undated". "Improvements in SEC Economic Analysis since Business Roundtable: A Structured Assessment," Working Papers 07002, George Mason University, Mercatus Center.
    13. Brown, Richard S., 2016. "Lobbying, political connectedness and financial performance in the air transportation industry," Journal of Air Transport Management, Elsevier, vol. 54(C), pages 61-69.
    14. Brázová Věra - Karin, 2015. "Response of Central European Civil Security Systems to the Economic Crisis," Central European Journal of Public Policy, Sciendo, vol. 9(2), pages 142-152, December.
    15. Uluc Aysun & Sami Alpanda, 2020. "Regulatory Arbitrage and Economic Stability," Working Papers 2020-02, University of Central Florida, Department of Economics.
    16. Franca Maino & Celestina Valeria De Tommaso, 2022. "Fostering Policy Change in Anti-Poverty Schemes in Italy: Still a Long Way to Go," Social Sciences, MDPI, vol. 11(8), pages 1-22, July.
    17. Louis‐Robert Beaulieu‐Guay & Marc Tremblay‐Faulkner & Éric Montpetit, 2021. "Does business influence government regulations? New evidence from Canadian impact assessments," Regulation & Governance, John Wiley & Sons, vol. 15(4), pages 1419-1435, October.
    18. Uluc Aysun & Michael Tseng, 2021. "Regulatory arbitrage and global push factors," Working Papers 2021-01, University of Central Florida, Department of Economics.
    19. Alison L. Bain & Julie A. Podmore, 2022. "THE SCALAR ARRHYTHMIA OF LGBTQ2S SOCIAL INCLUSION POLICIES: An Analysis of the Peripheral Municipalities of a ‘Progressive’ City‐region," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 46(5), pages 784-806, September.
    20. Klages-Mundt, Ariah & Minca, Andreea, 2022. "Optimal intervention in economic networks using influence maximization methods," European Journal of Operational Research, Elsevier, vol. 300(3), pages 1136-1148.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jbkreg:v:21:y:2020:i:4:d:10.1057_s41261-019-00120-1. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.palgrave-journals.com/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.