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After the 2008 financial crisis, international policy reforms were adopted on various aspects of derivatives markets, highlighting the need for precise and consistent rules. We examine the making of international rules concerning the resilience, recovery and resolution of central counterparties (CCPs), which form acritical global financial infrastructure. We argue that regulators played an important role in setting relatively precise and consistent international standards on CCPs over time. Facing common challenges, such as market fragmentation and interlinkages between issues, fostered a problem-solving approach in transgovernmental networks. We also identify the policy coordination tools used by regulators.

In the aftermath of the international financial crisis, the European Union (EU) adopted a series of regulatory reforms concerning capital adequacy, bank structures and resolution in order to tackle the risks created by financial institutions that were ‘too big to fail’. This article demonstrates different degrees of progress towards a supranational framework in two important areas of reform: Limited harmonization of the rules on bank structures, but robust progress toward the supranationalization of bank resolution, where the euro area dimension is also considered. What accounts for this variation? We draw on a synthesis of neofunctionalism and liberal intergovernmentalism to explain the diverging outcomes. We explain the low supranationalization in bank structural reforms with the absence of strong spillovers and availability of domestic options to unilaterally contain financial instability. In bank resolution, we examine the causal mechanisms through which significant spillovers modified the government preferences of key Member States.

Swedish decision-makers opted out of the European banking union (EBU) despite the large cross-border presence of Swedish banks in Estonia, Latvia, and Lithuania. The three Baltic states, on the other hand, have already joined the eurozone and are part of the EBU. This article identifies three important domestic considerations that have shaped Sweden's position. Firstly, Swedish decision-makers were concerned that member states outside the eurozone would not fully participate in EBU decision-making. Secondly, they were reluctant to pay for the recapitalisation or resolution of distressed non-Swedish banks in other EU countries. Thirdly, Sweden preferred to retain regulatory autonomy in crisis management. The article relates Sweden's position to the overall cautious approach of other non-eurozone members such as the UK and Denmark. Nevertheless, it highlights the enhanced role of the European Central Bank (ECB) in banking supervision not only for eurozone insiders such as Estonia, Latvia, and Lithuania but also for member states outside the Eurozone such as Sweden.

After the international financial crisis, new financial regulations were adopted at the international, regional (EU) and national levels. The timing, the sequencing and the interaction of reforms at different levels followed distinct patterns, which had implications for the design and the coherence of the rules. Despite the proliferation of new and amended international standards in finance, there are no formal mechanisms in the EU to ensure regulatory coherence in the multi-level, multi-venue regulatory dynamics observed in this sector. To shed light on this issue, we investigate the setting of rules on loss absorbing capacity (LAC) for banks, which is one of the main recent areas of post-crisis reform. We expect that regulators will play a key role in the quest for coherence in finance. The central hypothesis investigated in this paper is that they are better able to secure regulatory coherence when they have considerable rule-making competences.

The changes in the European financial architecture in the aftermath of the 2008 global financial crisis have highlighted the tension between the need for greater centralization of financial regulation at the EU level and the reluctance of some Member States to give up national regulatory autonomy. This article analyses the attitudes of new EU Member States toward the EU financial regulatory reforms. It investigates whether the extent of foreign ownership in the domestic financial sector, Euroscepticism, government support for deregulation and recent experiences of a severe financial crisis have an impact on countries' reservations. According to the results of the analysis, the higher the foreign ownership of a country's financial sector, the more reservations it expresses. The Eurosceptic attitude of the political parties in government matters as well. The more the governing political parties are opposed to EU integration in general, the more reservations one finds in a country's official position on the new EU financial architecture.

recent bank collapses as a result of the global financial crisis have highlighted the need to keep international bank supervision practices up to date with technological and product innovations in the sector. In the 1980s, coordination in international financial regulation resulted from multilateral negotiations in which states played a central role. Since then, international banking regulation has undergone significant transformation. This article probes the explanatory power of multi-level governance in the case of european bank regulation. According to the first proposition examined here, experts play an essential role in policy formulation. The second proposition stipulates that public, private and international actors participate in decision-making and shape the regulatory outcomes together with national regulators. The third proposition states that independent regulatory agencies, rather than government ministries, implement regulations and monitor compliance. The analysis is based on evidence from two new eu member states, bulgaria and hungary, that are representative of the two most common types of bank supervision organizational structure in the eu.

Chapter 1 presented two contrasting approaches to banking sector supervision. First, market-based regulation was prevalent in the decades leading up to the 2008 global financial crisis. This approach is based on the assumption that if sufficient information is available on the marketplace, market discipline will force financial actors to behave responsibly, and will thus promote financial stability (Barth et al. 2006; Wymeersch 2009; de Haan et al. 2012). Second, according to the risk- averse counter-cyclical regulation approach that gained more traction after the global financial crisis, bank supervisors need to take proactive measures when they observe vulnerabilities in the banking system (Grabel 2007; Goodhart and Persaud 2008; Griffith-Jones et al. 2009).

Chapter 5 takes a broader perspective and investigates the implications of the supervisory approaches developed in the four countries over the past 15 years for redesigning the European regulatory framework in the period 2009–2013, following the global financial crisis. The regulatory reforms in Central and Eastern Europe after 1989 harmonized national legislation and practices with those of the EU. During the pre-accession period, governments did not have the option to negotiate on what terms they would adopt the EU’s body of law, the acquis communautaire, and EU legislation was mostly copied into national law (Jacoby 2004; Vachudova 2005; Grabbe 2006). In banking, all Central and Eastern European candidates for EU membership adopted the single market and financial governance provisions in the EU’s acquis.

Effective banking supervision is important for ensuring financial sector stability. A country’s choice of banking sector regulatory approach has an impact on banks’ lending decisions and the overall availability of credit in the financial system (Greenwald and Stiglitz 2003: 5–8). Market-based regulation was prevalent in the decades leading up to the 2008 global financial crisis. This approach is based on the assumption that if sufficient information is available on the marketplace, market discipline will force financial actors to behave responsibly, and will thus promote financial stability (Barth et al. 2006; Wymeersch 2009; de Haan et al. 2012). However, reliance on market regulation allowed excessive risk-taking in the financial sector and destabilized the global financial system. Recently, scholars and policy-makers have considered the potential of implementing counter-cyclical regulatory measures to make the financial sector more resilient (Griffith-Jones et al. 2009; Independent Commission on Banking 2011). Proponents of counter-cyclical regulation argue that bank supervisors need to take pro-active measures when they observe vulnerabilities in the banking system, especially to cool off credit booms (Grabel 2007; Goodhart and Persaud 2008).