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Regulation and supervision of financial intermediaries in the EU: the aftermath of the financial crisis

By Iain Begg

Abstract

The financial crisis has reopened debate on the architecture of financial regulation and prudential supervision in the EU, calling into question the home country control principle that has prevailed since the mid-1980s. This article discusses how the growth of cross-border financial intermediation can best be regulated to limit the ensuing risks of financial contagion. It argues that a supranational supervisory system is now needed for some intermediaries, but that proximity to market actors at national level remains important. This points to a quasi-federal system as the way forward, but in constructing such a system account has to be taken of the diversity of Member State structures and preferences. The article concludes that even if a much more extensive EU-level competence is theoretically the optimal way forward, political considerations make it unlikely, suggesting that the crisis has broader implications for European integration

Topics: HJ Public Finance, JN Political institutions (Europe)
Publisher: Wiley-Blackwell in association with UACES, the University Association for Contemporary European Studies
Year: 2009
DOI identifier: 10.1111/j.1468-5965.2009.02037.x
OAI identifier: oai:eprints.lse.ac.uk:27708
Provided by: LSE Research Online
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