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ABSTRACT
The literature on financial regulation has typically emphasized the role of the powerful financial industry in shaping regulatory outcomes. However, capture theories cannot explain the prominence of financial consumer protection in post-crisis reform agendas. By contrast, this article argues that, despite their collective action disadvantage, a polymorphous network of civil society organizations was able to gain momentum after the financial crisis and to influence the financial reform process. In this policy window, where decision-makers were looking out for an alternative source of expertise, a transnationally connected civil society (TCS) network successfully mobilized to place consumer protection on reform agendas in tandem with public entrepreneurs and on the back of a popular backlash against big finance. This argument will be explored through a comparative study of the impact of transnational pressures on policy-makers in Europe and the US in the immediate aftermath of the crisis. In the conclusion, the article shortly discusses the substance of the financial reforms that have been undertaken.
ACKNOWLEDGEMENTS
The author would like to thank Cornelia Woll for her valuable comments and suggestions. I also thank Marion Fourcade, Jeanne Lazarus, Martino Comelli, Alex Barnard, Rahul Prabhakar, Kevin Young and three anonymous reviewers for detailed discussions of this article. Additional thanks go to Sciences Po Paris and the Max Planck Institute for the Study of Societies as well as all the interview partners.
Notes
1. Interview with Commission official, Brussels (March 2013).
2. Although some organizations refer to a ‘consumer movement’ to describe their actions to influence financial reforms, I prefer the term ‘network’, since the emphasis here is not on the mobilization of a broader public (as with movements) but on the way civil society got organized to bring policy change about. I use the term transnational to highlight the cross-border linkages among the groups involved.
3. Interview with representative of consumer association, Washington, DC (August 2011).
4. Interview with consumer activist, Washington, DC (September 2013).
5. Interview with industry lobbyist, Brussels (May 2013).
6. Interview with bank lobbyist, London (June 2012).
7. Interview with NGO representative, Brussels (March 2013),
8. Ibid.
9. Ibid.
10. Ibid.
11. Interviews with representatives of NGOs in Brussels (May, June, July and August 2011).
12. Interview with consumer representative, Washington, DC (September 2013).
13. Ibid.
14. Interview with NGO representative, Brussels (June 2011).
15. Interview with consumer representative, Paris (July 2011).
16. Ibid.
17. Interview with NGO representative, Brussels (June 2011).
18. Interview with bank lobbyist, Brussels (March 2013).
19. Warren gave testimony about the CFPB to Congress in May 2011 and to the House Financial Services Committee in June 2009 and in March 2011.
20. See, for example, online documents: BEUC ‘Facing Up to the Financial Crisis – BEUC's Concrete Suggestions to Protect Consumers in the Short and Long Term’ (2009) and FIN-USE's publication ‘Summary Report on EU Financial Markets: Putting Financial Users at the Heart of the Financial Market Reform’ (2010).
21. Interview with NGO representative, London (July 2011).
22. Interview with industry lobbyist, Brussels (May 2013).
23. Interview with NGO representative, Brussels (August 2011).
24. Interview with consumer representative, Paris (July 2011).
25. Interview with consumer representative, Washington, DC (Sept. 2013).
26. Interview with bank lobbyist, Brussels (March 2013).
27. Ibid.
28. Interview with consumer representative, London (August 2011).
29. Interview with NGO representative (August 2011).
30. Ibid.
31. Interview with consumer representative (August 2011).
32. Interview with OECD official, Paris (November 2012).
33. Interview with central banker, Paris (January 2013).
Additional information
Notes on contributors
Lisa Kastner
Lisa Kastner is Ph.D. Candidate in a binational doctoral program at the Max Planck Sciences Po Centre on Coping with Instability in Market Societies (MaxPo) at Sciences Po Paris and the Max Planck Institute for the Study of Societies in Cologne. She was a visiting scholar at the Elliott School of International Affairs at the George Washington University in Washington, DC. Research interests include international economic policies such as financial regulation, financial transaction taxes, as well as institutional change in response to the subprime crisis, particularly in Europe and the United States.
