The End of an Era in International Financial Regulation? A Postcrisis Research Agenda

TLDR

The 2007 global financial crisis elevated the reform of international prudential regulation to a top global policy priority, while prior research has linked the creation and strengthening of standards to interstate, domestic, and transnational policy arenas. Researchers should shift from explaining the strengthening of official international standards to analyzing their weakening in the postcrisis world. This shift requires scholars to focus on a broader set of regulatory outcomes, including informal regulatory convergence, regulatory fragmentation, and cooperative regulatory decentralization. The crisis exposed limitations in scholars’ understanding of interstate power, domestic politics, and transnational actors in international financial regulatory politics.

Abstract

Abstract The global financial crisis that erupted in summer 2007 has made the reform of international prudential financial regulation one of the top priorities of global public policy. Past scholarship has usefully explained the creation and strengthening of international financial standards with reference to three policy arenas: interstate, domestic, and transnational. Despite the accomplishments of this specialist literature, the recent crisis has revealed a number of limitations in the ways scholars have understood interstate power relations, the influence of domestic politics, and the significance of transnational actors within international financial regulatory politics. Taken together, developments in each of these three arenas suggest that researchers may also need to be prepared to shift from explaining the strengthening of official international standards to analyzing their weakening in the postcrisis world. The latter task will require scholars to devote more analytical attention to a wider set of international regulatory outcomes, including “informal regulatory convergence,” “regulatory fragmentation,” and especially “cooperative regulatory decentralization.”