After bailing out some of their largest banks and taking unprecedented measures to keep their economies afloat during the Global Financial Crisis (2008-10), policymakers in multiple rich democracies turned to fixing the regulatory foundations of their financial systems. A central and contentious plank of this drive were structural reforms, or attempts to separate commercial and investment banking. In this paper, I examine divergent policies to banking structural regulation in three European countries similarly badly affected during the crisis: the UK, Germany and the Netherlands. Each country was forced to bail out at least one systemic bank during the crisis, and each gave structural measures consideration under a conservative-led coalition government. Ultimately, the United Kingdom adopted the strongest punitive legislation, Germany a milder package and to date the Netherlands has not adopted any structural regulations. That other, less financialised economies baulked whilst the ‘financial heartland’ of the UK moved most decisively against the wishes of its largest banks challenges the expectations among prevailing structural and instrumental theories of the banks’ business power. In this paper, I develop an alternative insider-outsider approach that focuses on how incumbency and electoral competition enable and constrain business power and shape policy outcomes. I draw on a mix of interviews, primary and secondary sources to chart the lifecycle and prospects for structural reform in each country. The ‘outsider’ nature of the new British government in 2010 was critical to it ensuring meaningful change. In Germany, outsider influence over structural reform helped force limited action from a reluctant government. Meanwhile, reformist voices in the Netherlands lacked a credible and committed political vehicle, ultimately leading to only cosmetic consideration and no reform.
