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Beyond ideological battles: a strategic analysis of hedge fund regulation in Europe

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  • Cornelia Woll

    (CERI - Centre de recherches internationales (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

Abstract

The highly politicized debate about the recent Alternative Investment Fund Manager (AIFM) Directive of the European Union led many observers to suspect an ideological battle between countries seeking to impose transnational regulation on financial service industries such as hedge funds and liberal market economies insisting on the benefits of market discipline in order to protect their financial centers. The battle that appeared to particularly pit France against the United Kingdom can thus be interpreted as an example of a regulatory paradigm shift in the aftermath of the crisis. This article cautions against such an ideas-centered account of financial regulation and points to the economic interests that drove the French and German agendas. However, contrary to the assumptions of traditional political economy approaches, national preferences were not simply defined by the aggregate of a country's economic interests. Rather, industry success in shaping government positions on alternative investment regulation crucially depended on how a given industry fit into the government's overarching geo-political agenda. By highlighting this feedback loop between government strategy and industry lobbying, the paper proposes a strategic analysis of financial regulation, as opposed to accounts that consider positions to be pre-determined by ideas or socio-economic structures.

Suggested Citation

  • Cornelia Woll, 2011. "Beyond ideological battles: a strategic analysis of hedge fund regulation in Europe," Working Papers hal-01069491, HAL.
    • Handle: RePEc:hal:wpaper:hal-01069491
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-01069491
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    1. repec:hal:wpspec:info:hdl:2441/eu4vqp9ompqllr09hae2n8o0n is not listed on IDEAS
    2. Franklin R. Edward, 1999. "Hedge Funds and the Collapse of Long-Term Capital Management," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 189-210, Spring.
    3. Jeffrey M. Chwieroth, 2010. "Capital Ideas: The IMF and the Rise of Financial Liberalization," Economics Books, Princeton University Press, edition 1, number 9087.
    4. Helleiner, Eric & Pagliari, Stefano, 2011. "The End of an Era in International Financial Regulation? A Postcrisis Research Agenda," International Organization, Cambridge University Press, vol. 65(1), pages 169-200, January.
    5. Cornelia Woll, 2011. "Beyond Ideological Battles: A Strategic Analysis of Hedge Fund Regulation in Europe," Les Cahiers européens de Sciences Po 2, Centre d'études européennes (CEE) at Sciences Po, Paris.
    6. Frieden, Jeffry A., 1991. "Invested interests: the politics of national economic policies in a world of global finance," International Organization, Cambridge University Press, vol. 45(4), pages 425-451, October.
    7. Cornelia Woll, 2008. "Firm Interests: How Governments Shape Business Lobbying on Global Trade," Post-Print hal-02183956, HAL.
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    Cited by:

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    2. Manuela Moschella & Eleni Tsingou, 2013. "Regulating finance after the crisis: Unveiling the different dynamics of the regulatory process," Regulation & Governance, John Wiley & Sons, vol. 7(4), pages 407-416, December.
    3. Cornelia Woll, 2011. "Beyond Ideological Battles: A Strategic Analysis of Hedge Fund Regulation in Europe," Les Cahiers européens de Sciences Po 2, Centre d'études européennes (CEE) at Sciences Po, Paris.
    4. Cornelia Woll, 2011. "Beyond Ideological Battles:A Strategic Analysis of Hedge Fund Regulation in Europe," Sciences Po publications 02/2011, Sciences Po.
    5. Simon Grima & Inna Romanova & Frank Bezzina & Frank Chetcuti Dimech, 2016. "Alternative Investment Fund Managers Directive and its Impact on Malta’s Financial Service Industry," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 70-85.
    6. Barbara Sennholz-Weinhardt, 2014. "Regulatory competition as a social fact: Constructing and contesting the threat of hedge fund managers' relocation from Britain," Review of International Political Economy, Taylor & Francis Journals, vol. 21(6), pages 1240-1274, December.
    7. repec:spo:wpecon:info:hdl:2441/eu4vqp9ompqllr09hae2n8o0n is not listed on IDEAS
    8. repec:hal:wpspec:info:hdl:2441/eu4vqp9ompqllr09hae2n8o0n is not listed on IDEAS

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