Why are international standards not set? Explaining ‘weak’ cases in shadow banking regulation

Scott James, Lucia Quaglia

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Abstract

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, 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 makes an important contribution to public policy scholarship by generating new insights into regulatory conflicts and the scope conditions for international agreement.
Original languageEnglish
Number of pages42
JournalJournal Of Public Policy
Publication statusAccepted/In press - 23 Oct 2023

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