It has often been argued that variations in market regulation in the member countries of the EU continue to be formidable obstacles to European financial market integration (Lamfalussy, 2000). The question has subsequently been raised whether differences in market regulation are being upheld in order to protect domestic companies from foreign competitors. This paper asks why national approaches to sectoral regulation differ in the first place. If one is to believe the economic literature on sectoral regulation, public intervention is only justified in cases of market failures (Kay and Vickers, 1990). So, why do we see different approaches to market regulation? Insurance here is seen as an interesting area of investigation as it is itself about regulating risk. “[A] few years ago in Russia, it wasn’t possible to insurance your baggage on a train, although you can now. Why couldn’t you insure it? Well because if you lose your luggage, so what? These things happen, it’s an act of God. That’s how the world used to be. The idea that you can cover every risk is an extraordinarily odd idea but an intriguing one once you start to think about it. The idea of covering risk and the notion of liability is bound up, and all these things are in some way central to th
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