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Asymmetric influence in global banking regulation

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  • Roman Goldbach

Abstract

Global regulatory standard setting is one of the most lucrative battlefields of the international political economy. Asymmetric influence and regulatory capture in setting such standards can undermine the regulation of economic activity, with negative externalities for the society. Scholars of International Political Economy, and of global finance in particular, are in the process of revealing the mechanisms underlying such regulatory capture and failure. I contribute to this analysis with an empirical evaluation of the mechanisms underlying influence in setting such standards. I assess the influence of nine different national, transnational, and international actors in the case of global banking regulation (the Basel II framework of the Basel Committee on Banking Supervision). On the basis of a quantitative--qualitative assessment, I develop integration and rejection rates to measure influence in global regulation. My findings reveal that the key dynamic in setting global standards is the simultaneous influence of national (competition state) coalitions of politicians and firms as well as transnational harmonization coalitions of transnationally active firms and regulators. The results provide a basis for a new argument to understand regulatory capture and failure.

Suggested Citation

  • Roman Goldbach, 2015. "Asymmetric influence in global banking regulation," Review of International Political Economy, Taylor & Francis Journals, vol. 22(6), pages 1087-1127, December.
    • Handle: RePEc:taf:rripxx:v:22:y:2015:i:6:p:1087-1127
    DOI: 10.1080/09692290.2015.1050440
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    References listed on IDEAS

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    1. Daniel W. Drezner, 2007. "Bringing the Great Powers Back In, from All Politics Is Global: Explaining International Regulatory Regimes," Introductory Chapters, in: All Politics Is Global: Explaining International Regulatory Regimes, Princeton University Press.
    2. Tarullo, Daniel, 2008. "Banking on Basel: The Future of International Financial Regulation," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4235, July.
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    Cited by:

    1. Adam W. Chalmers, 2020. "Unity and conflict: Explaining financial industry lobbying success in European Union public consultations," Regulation & Governance, John Wiley & Sons, vol. 14(3), pages 391-408, July.
    2. Mordue, Greig & Yeung, Anders & Wu, Fan, 2020. "The looming challenges of regulating high level autonomous vehicles," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 174-187.
    3. Coban, Mehmet Kerem, 2019. "Compliance forces, domestic policy process, and international regulatory standards: Compliance with Basel III," OSF Preprints x32nw, Center for Open Science.
    4. Baud, Céline & Chiapello, Eve, 2017. "Understanding the disciplinary aspects of neoliberal regulations: The case of credit-risk regulation under the Basel Accords," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 46(C), pages 3-23.
    5. Haselmann, Rainer & Sarkar, Arkodipta & Singla, Shikhar & Vig, Vikrant, 2022. "The political economy of financial regulation," LawFin Working Paper Series 45, Goethe University, Center for Advanced Studies on the Foundations of Law and Finance (LawFin).
    6. Lucia Quaglia & Aneta Spendzharova, 2023. "Explaining the EU’s Uneven Influence Across the International Regime Complex in Shadow Banking," Politics and Governance, Cogitatio Press, vol. 11(2), pages 6-16.

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