How can we explain the strength of bank structural reform proposals in the UK to address Too-Big-To-Fail concerns versus the weakness of the reforms proposed and adopted in France and Germany? This is puzzling given the presence of very large universal banks in all three countries that had suffered significant loses during the international financial crisis. We argue that the politics of banking reform is key to understanding regulatory responses in different national contexts. This paper explains the different approaches pursued in the three countries by analysing the political-institutional response to Too-Big-To-Fail banks and the development of structural reform proposals. We explain why the UK acted quickly to establish the Independent Commission on Banking which helped to insulate the process from industry influence, culminating with the ‘ringfencing’ reforms. By contrast, in France and Germany structural reform was shaped by the interests of banks from the start, although in different ways reflecting national political institutional frameworks and longstanding relations between states and banks.
