 The Rise and Stall of EU Macro‐Prudential Policy. An Empirical Analysis of Policy Conflicts over Financial Stability, Market Integration, and National Discretion*Bart Stellinga Journal of Common Market Studies, 2021, vol. 59, issue 6, 1438-1457 Abstract: The 2007–09 financial crisis appeared to demonstrate the need for a strong, supranational EU macro‐prudential policy framework to prevent similar future disasters. The implemented framework, however, is neither. It is highly complex, involving many constraints on the use of macro‐prudential instruments. It is also one of the principal areas of national discretion in EU banking regulation. To explain this, I build on the ‘financial trilemma’ thesis which holds that there are inherent tensions between pursuing financial stability, financial integration and national financial policies. Supranationalizing macro‐prudential policy proved difficult due to a lack of consensus on how to measure systemic risks and because of the distributional consequences involved. This increased the tension between stability and integration, as national macro‐prudential policies could constrain cross‐border finance and they could be misused for competitiveness considerations. Key policy actors disagreed on which goals to prioritize, with bargaining leading to a convoluted policy framework. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jcmkts:v:59:y:2021:i:6:p:1438-1457 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Common Market Studies is currently edited by Jim Rollo and Daniel Wincott More articles in Journal of Common Market Studies from Wiley Blackwell |
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