Theory: Influence in Global Banking Regulation and the Transnational Regulatory Regime

Abstract

This book’s aim is to reveal how the transnational regulatory regime conditions influence, and how this translates into regulatory failure. Therefore, in this chapter, I outline a synthetic theoretical framework that delineates the TRR and how it conditions the interaction of influential actors and institutions, and, thereby, results in regulatory loopholes being created at the stage of developing transgovernmental standards. The framework’s approach is to delineate mechanisms of politico-economic influence of national, transnational and interstate actors within the global political economy of banking regulation. I reveal how the simultaneous, unreconciled influence that national and transnational coalitions wield in the process of setting harmonised regulatory standards is entrenched in the governance and opportunity structure of the TRR, which is conducive to regulatory failure (and which can undermine the provision of financial stability).