scholarly journals Rule maker or rule taker? Brexit, finance and UK regulatory autonomy

2020 ◽  
pp. 019251212096738
Author(s):  
Scott James ◽  
Lucia Quaglia
Keyword(s):  
Financial Services ◽  
Financial Stability ◽  
Financial Regulation ◽  
Market Access ◽  
Bureaucratic Politics ◽  
Added Value ◽  
High Status ◽  
The European Union ◽  
Financial Industry ◽  
The Uk

Given the integration of the City of London into the single market for financial services in the European Union (EU), theories of transnational governance would expect the United Kingdom (UK) to favour close regulatory alignment with the EU27 post-Brexit to maximise market access and financial stability. Surprisingly, however, the UK has consistently demanded regulatory flexibility in financial services and has accepted reduced market access. We argue that the explanation is twofold. First, UK preferences reflect the need to balance the competing demands of elected officials, the financial industry and financial regulators. Second, drawing on a bureaucratic politics perspective, we suggest that UK preferences have been strongly shaped by the importance to UK regulators of retaining autonomy over high-status policy competences. This article contributes to the broader literature on the politics of financial regulation by highlighting the added value of incorporating a bureaucratic politics perspective when explaining financial regulatory preferences.

The UK and Multi-level Financial Regulation

2020 ◽  
Author(s):  
Scott James ◽  
Lucia Quaglia
Keyword(s):  
Financial Regulation ◽  
Hedge Fund ◽  
Regulatory Reform ◽  
Political Support ◽  
International Standards ◽  
Bank Capital ◽  
The European Union ◽  
Financial Industry ◽  
The Future ◽  
The Uk

The book examines the role of the United Kingdom (UK) in shaping post-crisis financial regulatory reform, and assesses the implications of the UK’s withdrawal from the European Union (EU). It develops a domestic political economy approach to examine how the interaction of three domestic groups—elected officials, financial regulators, and the financial industry—shaped UK preferences, strategy, and influence in international and EU-level regulatory negotiations. The framework is applied to five case studies: bank capital and liquidity requirements; bank recovery and resolution rules; bank structural reforms; hedge fund regulation; and the regulation of over-the-counter derivatives. We conclude by reflecting on the future of UK financial regulation after Brexit. The book argues that UK regulators pursued more stringent regulation when they had strong political support to resist financial industry lobbying. UK regulators promoted international harmonization of rules when this protected the competitiveness of industry or enabled cross-border externalities to be managed more effectively, but were often more resistant to new EU rules when these threatened UK interests. Consequently, the UK was more successful at shaping international standards by leveraging its market power, regulatory capacity, and alliance-building (with the US). But it often met with greater political resistance at the EU level, forcing it to use legal challenges to block reform or secure exemptions. The book concludes that political and regulatory pressure was pivotal in defining the UK’s ‘hard’ Brexit position, and so the future UK–EU relationship in finance will most likely be based on a framework of regulatory equivalence.

Part II UK Securities Markets, 4 Recognized Investment Exchanges (RIEs) and Recognized Clearing Houses (RCHs)

2021 ◽  
Author(s):  
Penn Bob ◽  
Forzani Alex ◽  
Allen & Overy LLP
Keyword(s):  
European Union ◽  
Financial Services ◽  
Securities Markets ◽  
Financial Instruments ◽  
The European Union ◽  
Financial Contracts ◽  
The Uk ◽  
Final Settlement ◽  
Market Infrastructure

This chapter summarizes and discusses the UK regulatory framework for recognized investment exchanges (RIEs) and recognized clearing houses (RCHs) under the Financial Services and Markets Act 2000 (FSMA). It considers the framework in light of the current and forthcoming European legislation. It also examines the applicability of the framework to RIEs and RCHs in the context of the recast Markets in Financial Instruments Directive II (MiFID II), European Market Infrastructure Regulation (EMIR) and the UK's departure from the European Union (Brexit). This chapter outlines the central role of exchanges and clearing houses in the operation of financial markets. It explains that the exchanges offer marketplaces for the trading of financial instruments, provide market data which facilitates trading, and establish standards for the offering of securities, while clearing houses manage the performance of financial contracts between the point of execution and final settlement and mitigating the risk and consequences of default.

23. Freedom of Establishment and to Provide Services

EU Law ◽  
2020 ◽  
pp. 832-888
Author(s):  
Paul Craig ◽  
Gráinne de Búrca
Keyword(s):  
European Union ◽  
Electronic Commerce ◽  
Financial Services ◽  
Case Law ◽  
Economic Interest ◽  
The European Union ◽  
Freedom Of Establishment ◽  
Provision Of Services ◽  
General Economic Interest ◽  
The Uk

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing students with a stand-alone resource. The Treaty on the Functioning of the European Union (TFEU) has two separate chapters on self-employed persons who move on a permanent or temporary basis between Member States: the chapters on freedom of establishment and freedom to provide services. The central principles governing freedom of establishment and the free movement of services are laid down in the TFEU and have been developed through case law. Important developments have also been brought about through secondary legislation in sectors such as insurance, broadcasting, financial services, electronic commerce, telecommunications, and other ‘services of general economic interest’. This chapter focuses on the broad constitutional principles applicable to every sector. The UK version contains a further section analysing issues concerning freedom of establishment and the provision of services between the EU and the UK post-Brexit.

Legal and Conduct Risk in the Financial Markets

2018 ◽  
Author(s):  
McCormick Roger ◽  
Stears Chris
Keyword(s):  
Financial Markets ◽  
Financial Services ◽  
Financial Stability ◽  
Current Approach ◽  
Fiduciary Duty ◽  
Regulatory Change ◽  
Regulatory Structure ◽  
Legal Risk ◽  
The Uk ◽  
Libor Manipulation

This third edition on legal risk has been expanded to include much new material specifically on conduct risk. It has been updated to take into account developments in the law and professional standards concerning such risks and associated values in the context of the financial markets. Significant (and in some cases, endemic) conduct-related scandals, such as the widespread mis-selling of financial products and LIBOR manipulation, exposed by the financial crisis, have resulted in legal and regulatory change in equal measure (and profound effect) to that of the prudential and financial stability concerns captured in the second edition. Consequently this new edition fully examines the current approach to trust, ethics, and conduct within the broader framework of reputational and legal risk. In doing so, it clarifies what constitutes legal risk in contemporary financial markets and how to manage it, drawing on examples and case studies. Other developments in areas such as the resolution/insolvency of banks, the revision of the UK regulatory structure from the Financial Services Authority to the Financial Conduct Authority and Prudential Regulation Authority, and the recently made new crime of reckless management of a bank are all considered in full. There is also discussion of trends in areas ripe for development such as fiduciary duty amongst financial markets participants.

Part I Regulatory Structure, 3 European Financial Services

2018 ◽  
Author(s):  
Walker George ◽  
Purves Robert ◽  
Blair Michael
Keyword(s):  
Financial Services ◽  
Primary Sources ◽  
Banking Union ◽  
The European Union ◽  
Regulatory Structure ◽  
European Court ◽  
Treaty Of Rome ◽  
The Uk ◽  
Council Of Ministers ◽  
The Eu

This chapter examines the evolution of the European Union' financial services law and its impact on the development of financial services law in the UK, as it stands at the end of 2016, six months after the EU referendum. It first describes the evolving role and functions of the EU institutions, namely: the Council of Ministers, the European Commission, the European Court of Justice, and the European Parliament. It then considers the primary sources of EU law, including treaties, and the effects of the various changes in the Treaty of Rome. It also discusses the establishment of the single market in financial services and the moves to establish a banking union. Finally, it analyses the substantive financial services measures that have been adopted in the EU since the 1970s.

The Impact of Brexit on EU27 on Trade, Investments and Financial Services

2018 ◽  
Vol 18 (1) ◽  
pp. 20170097 ◽  
Author(s):  
Scheherazade S. Rehman ◽  
Pompeo Della Posta
Keyword(s):  
European Union ◽  
Financial Services ◽  
Trade Agreements ◽  
The European Union ◽  
Short Term ◽  
Legal Principles ◽  
Article 50 ◽  
The Uk ◽  
The Impact ◽  
Trade And Investment

On June 23, 2016, the UK decided to leave the European Union (EU), commonly known as “Brexit”. The UK has two years to conclude their new arrangement with the EU27 after evoking Article 50 Treaty of Lisbon officially, which it did on March 27, 2017. While there is a range of possible trade agreements most are unlikely as they would either imply repudiating firm EU legal principles or strong promises that the current UK government is committed to maintain. The article discusses these options. Moreover, the article focuses on the trade and investment flows between the UK and EU27 and discusses the possible short-term implications of Brexit with a specific attention to the most impacted sector, that of financial services.

scholarly journals Regulatory power, post-crisis transatlantic disputes, and the network structure of the financial industry

2017 ◽  
Vol 19 (2) ◽  
pp. 241-266 ◽  
Author(s):  
Lucia Quaglia
Keyword(s):  
United States ◽  
European Union ◽  
Network Structure ◽  
Hedge Funds ◽  
Financial Regulation ◽  
The United States ◽  
The European Union ◽  
Financial Industry ◽  
Active Involvement ◽  
Bank Structure

AbstractThe international financial crisis was followed by waves of domestic regulatory reforms, first and foremost, in the United States and the European Union. Post-crisis financial regulation was sometimes different across jurisdictions. Moreover, the United States and the European Union sought in various ways to (re)assert their regulatory power not only vis-à-vis the market, but also with regard to other jurisdictions, which often resisted the projection of regulatory power beyond national borders. Consequently, a handful of important post-crisis transatlantic regulatory disputes emerged concerning E.U. rules on hedge funds, U.S. rules on bank structure and E.U. and U.S. rules on over-the-counter (OTC) derivatives. These disputes mainly involved the terms of access to each other's markets, the equivalence between domestic rules, and the extraterritorial effects of those rules. Some of these disputes were also intra-E.U. disagreements, whenever the preferences of the United Kingdom were different from those of Continental countries and similar to those of the United States. The network structure of the financial industry and the patterns of financial interdependence across the Atlantic amplified the extra territorial effects of domestic reforms, but at the same time triggered an active involvement of the transnational financial industry in the management and, eventually, the settlement of these disputes.

scholarly journals MODERN TRENDS OF PRIVATE PENSION INSTITUTIONS DEVELOPMENT IN THE EUROPEAN UNION

2017 ◽  
pp. 124-132
Author(s):  
Zhanna Dovhan ◽  
Igor Kravchuk
Keyword(s):  
Financial Stability ◽  
Private Pension ◽  
Minor Role ◽  
Occupational Pension ◽  
Defined Benefit ◽  
The European Union ◽  
Financial Industry ◽  
High Concentration ◽  
Pension Systems ◽  
Cross Border

Introduction. Current demographic trends and social and economic models initiate the challenges regarding the possibility of adequate pension provision of the population in many European countries. International organizations forecasts confirm the need to diversify the sources of pension benefits to the population by accelerating the development of private pension institutions. At the same time effective regulation environment of pension assets management should be provided. It must be done because of their important social value and interrelationship with financial markets, in particular in the aspect of their stable functioning. Purpose. The article aims to identify the key elements of the financial institutions functioning regarding pension assets managing in the European market. They can be determinants of the intensification of regulation modernization of private pension sector in terms of social and financial stability. Method (methodology). Structural and dynamics and correlation analysis of the private pension institutions activities in the European financial market have been considered in this research. Results. The features of EU private pension systems modern trends have been determined. They indicate an increase in financial fragility (in some countries) through the predominance of structures with a defined benefit among occupational pension programs. They also show a growth of share of more risky investments in the instruments of collective investment institutions in the structure of pension investment portfolios, high concentration of cross-border pension assets, sensitivity to cross-border contagion, taking into consideration the low values of home bias and the strategies homogeneity. Low levels of private pension programs coverage of the population, as well as a minor role in the economy (the ratio of pension assets to GDP) in many EU countries demonstrate the feasibility of stimulation the financial industry development. The key characteristics determine the necessity of development of prudential regulations (reduction of pension systems fragility), and stimulation regulations (standards implementation for the development of pan-European personal pension products, which will be standardized by main characteristics).

scholarly journals Transcontinental Partnerships at the Crossroads: Factors, Risks, Consequences

2017 ◽  
Vol 10 (4) ◽  
pp. 54-69 ◽  
Author(s):  
Liudmila F. Lebedeva
Keyword(s):  
National Security ◽  
Financial Services ◽  
Financial Regulation ◽  
Bilateral Trade ◽  
Leadership Role ◽  
Practical Implementation ◽  
The European Union ◽  
Donald Trump ◽  
The Us ◽  
Trade And Investment

Transcontinental partnerships – Trans-Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment Partnership (TATIP) – have been analyzed in view of the new challenges in polycentric world, US foreign economic policy changes, risks for the national economies of the block’s participants, as well as for the other countries. The TPP and the TATIP are in focus as the new stage of the world integration process. The TATIP can deepen the already substantial economic ties between the US and the European Union. But what will be included in the chapters of the agreement on financial services, agricultural products, some other sectors is still subject to debate. Particular concerns arise about the role for the TATIP in harmonizing financial regulation. The practical implementation of president Donald Trump plans to «promote American industry, protect American workers» began with the US withdrawal from the TPP, with negotiating new bilateral trade deals in mind. Since that decision, the leaders of Japan, Singapore, Australia, and other TPP participants emphasized the strategic importance of this agreement for their countries and for US leadership in the region. Withdrawing from the TPP raises concerns among US trade partners and allies in the region and put many questions before them. Besides, US withdrawal from the TPP effectively gives green light to assert a more pronounced leadership role in the region for China, which is already a major trade and investment partner for TPP countries. Furthermore, Donald Trump turned attention to certain imports as a threat to national security and thus potentially subject to steep tariffs. The US steps in this way may undermine the rules-based trading system, and put many questions before TPP partners and other countries. Whether import restrictions for national security reasons be implemented, they may damage not only China as the main U.S. imports driver; but other countries as well, and lead to new barriers against US exports by trading partners. The Trump administration initiatives not only represents a challenge for countries that linked closely to the American economy due to the trade-economic agreements, but leads to new opportunities and choices in international economic relations.

scholarly journals Fintech: A Literature Review

2021 ◽  
Vol 15 (1) ◽  
pp. 80
Author(s):  
Ferdinando Giglio
Keyword(s):  
Financial Services ◽  
Financial Stability ◽  
Business Models ◽  
New Technologies ◽  
National Level ◽  
Industrial Sector ◽  
World Bank Group ◽  
The European Union ◽  
Acceleration Force ◽  
Bank Group

This article analyzes the Fintech evolution. After describing the process of this phenomenon, some of the main definitions are provided both nationally and internationally. Finally, six main models of Fintech are analyzed. Through a systematic literature, 14 articles have been selected that deal with the phenomenon of Fintech. Six Fintech business models implemented by the ever growing number of Fintech startups have been identified, payment, wealth management, crowdfunding, loan, capital market and insurance services. Internationally, Fintech has already been defined by the International Monetary Fund (IMF), the World Bank Group (WBG), the Financial Stability Board (FSB), the Organization for Economic Cooperation and Development (OECD), the International Organization of Securities Commissions (IOSCO), the Bank for International Settlements (BIS). On a national level, on the other hand, Fintech has been analyzed by various countries, USA, United Kingdom, Singapore, China, Switzerland, China, Australia and the European Union. Fintech refers to a broad set of innovations - observable in the financial field in a broad sense - which are made possible by the use of new technologies both in the offer of services to end users and in the internal production processes of financial operators as well as in the design of market enterprises, without thereby compromising new possible configurations of intersectoral activities. Fintech appears to be representative of innovative methods - based on technology - of carrying out activities directly or indirectly connected to financial services rather than being a pre-defined industrial sector. Following the logic of the digital economy, Fintech contributes to designing an open and continuous network of modular services for businesses, individuals and banking, financial and insurance intermediaries, becoming a powerful acceleration force for the integration policies of the financial services markets in the EU.

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