Search

We discuss the geoeconomics of the Single Market in financial services in the European Union (EU). We examine three case studies that concern the EU and other major jurisdictions and that range from incipient geoeconomic use to outward weaponisation of the Single Market in finance. These cases are (1) the post‐2008 crisis transatlantic tug of war, whereby the EU leveraged its Single Market vis‐à‐vis the United States, seeking to set the rules for global finance; (2) the Brexit negotiations, when the EU acted as a bloc against the United Kingdom and successfully safeguarded the integrity of the Single Market; and (3) the fulsome war in Ukraine, during which the EU 'weaponised' its Single Market through the adoption of financial sanctions against Russia. We argue that a combination of external and internal factors accounts for this pattern: the evolution of the international economic and political system, in particular, the increasing challenges to the liberal international order, and intra‐EU developments, namely, the EU's ability to deploy its Single Market geoeconomically. [ABSTRACT FROM AUTHOR]

This article explains a dominant, curious and important pattern that emerges from our original data on 11 areas of financial regulation in the United States and the European Union from the Great Financial Crisis to 2020: sustained regulatory stringency in both jurisdictions. Our novel explanation, rooted in theories about international economic interdependence, temporal process and market power, emphasizes cross-border interactions that arose from a build-up of ‘border-policing’ capacities. Our medium-n study, which combines congruence analysis and process tracing, reveals a causal mechanism – ‘joint reinforcement’ – whereby the potential penalties imposed by one of the two jurisdictions prevent or temper the other from watering down-regulation. The study pushes the boundaries of qualitative research, advances theory and speaks to debates about global public goods. [ABSTRACT FROM AUTHOR]

Why are international regulatory standards not set? While most of the literature focuses on explaining positive cases of standard-setting where international rules are agreed upon, weak or negative cases remain prevalent and yet surprisingly under-explored. To explain these cases in the area of financial services, we integrate an inter-state explanation, which focuses on competition between major jurisdictions, with a transgovernmental explanation, which relates to conflict between different regulatory bodies at the international level. We also consider how these dimensions interact with financial industry lobbying. This allows us to construct a typology differentiating between distinct types of cases concerning international standard-setting: (1) absent standards, (2) non-agreed standards, (3) symbolic standards, and (4) agreed standards. The explanatory leverage of our approach is illustrated through a systematic structured focused comparison of four post-crisis cases related to “shadow banking.” The article generates novel insights into regulatory conflicts and the scope conditions for international agreement. [ABSTRACT FROM AUTHOR]