Research on international and European financial regulation has emphasized again and again that characteristics of domestic financial sectors matter in shaping policy preferences when it comes to negotiations on shared banking regulations. At the same time, de- and reregulatory harmonization as well as financial innovations have not left domestic financial sectors and their modi operandi unchanged.
Rather than assuming a mechanistic relationship between structural characteristics, status-quo oriented distributional considerations and policy preferences, the paper argues that policy stances result from domestic bargains which do not only reflect global level distributional consequences but also the degree of preference convergence among key stakeholders as well as collectively shared prospective representations of developments within the domestic financial sector.
The paper draws on insights from case studies on how the relevant policy communities in Germany and France defined their positions in the process of global banking reforms after the financial crisis, namely the Basel III and its transposition within the European Union by the CRD4-CRR. The fieldwork conducted between May and November this year comprises over 60 interviews with, inter alia, representatives from banks, regulatory and supervisory agencies and the corporate sector.
The case studies show that the process of collective preference formation entails an interactive as well as a prospective component. While large parts of the banking and the corporate sectors' interests converged on the persistence of traditional bank lending in Germany, and hence regulations that would sustain it, interest convergence in France did not occur to the same extent as the bank-lending relationship is more conflictual; as a consequence, reform debates focused more on the establishment of alternative channels of funding.
Similar mechanisms might also characterize the negotiations on and collective representations of supranational vs. national banking supervision and the differential opposition among countries regarding certain characteristics of a European banking union.
