International Financial Regulation as a Legal Enterprise

• In Event: Post-Crisis Politics of Financial Regulation: Domestic and Global Dynamics

Abstract

This paper traces the emergence of a legal-ish system of oversight of the global financial system.  It looks to be one of the principal accomplishments of international governance in the wake of the financial crisis, and it is one that has developed through regulation, rather than through more traditional mechanisms of diplomacy or public international law. Post-crisis financial regulation has resulted in institutionalization along hierarchical lines, with a political overseer, a regulatory supervisor, and a group of task-specific but increasingly coordinated regulatory networks making the rules for banks, capital markets participants, insurers, and other financial intermediaries.  What those regulators do, moreover, is both procedurally regular and increasingly explicable with resort to a few organizing principles that mimic the fundamental principles espoused by hard law international organizations. Political supervision, increasingly regularized output, and bureaucratic order are the fundaments of administrative law.  International financial regulation is looking increasingly like an administrative agency stretched into a global multilateral context.  This “agencification” of international financial regulation offers a regulatory alternative to traditional public international law or state interest-based explanations of regulatory cooperation.

Author

• David Zaring, The Wharton School