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ABSTRACT
Who controls global policy debates on shadow banking regulation? We show how experts secured control over how issues in shadow banking regulation are treated by examining the policy recommendations of the Bank of International Settlements, the International Monetary Fund and the Financial Stability Board. The evidence suggests that IO experts embedded a bland reformism opposed to both strong and ‘light touch’ regulation at the core of the emerging regulatory regime. Technocrats reinforced each other's expertise, excluded some potential competitors (legal scholars), co-opted others (select Fed and elite academic economists), and deployed measurement, mandate, and status strategies to assert issue control. In the field of shadow banking regulation, academic economists’ influence came from their credibility as arbitrageurs between several professional fields rather than their intellectual output. The findings have important implications for how we study the relationship between IO technocrats and experts from other professional fields.
ACKNOWLEDGEMENTS
We wish to thank Andrew Baker, Aitor Erce, Benjamin Braun, Mark Blyth, Daniela Gabor, Kevin Gallagher, Oddny Helgadottír, Izabella Kaminska, Perry Mehrling, Nadav Peer Orian, Paul Tucker, Duncan Wigan, and two anonymous reviewers for insightful feedback. Boston University's Center for Law, Policy and Finance funded and hosted the workshop where an earlier version of this article was presented. Critically, our research was supported by the ‘European Legitimacy in Governing through Hard Times: the role of European Networks’ (ENLIGHTEN (#649456-ENLIGHTEN)), a project (2015–2018) funded by the Horizon 2020 EU research program.
DISCLOSURE Statement
No potential conflict of interest was reported by the authors.
Notes
1. Cited in Financial Times, May 28, 2015.
2. While the American Business Law Journal and the Journal of Law and Economics were also recommended, these journals contained little to no discussion of shadow banking and were excluded from our sample.
3. We caution that one should not read too much into this reformism, strong as it may be. Reformists are not ready to advocate comprehensive limitations of financial innovation and continue to uphold the presumed virtues of the global integration of finance. References to bolder calls for regulation similar to those governing commercial banks for any issuer of short-term ‘money-like’ claims remain rare and buried in non-committal footnotes.
Additional information
Funding
Notes on contributors
Cornel Ban
Cornel Ban is an assistant professor of political economy at Boston University's Frederick S. Pardee School for Global Studies. His research engages with the politics of macroeconomic and financial policy issues and has a strong focus on Europe and transnational expert networks.
Leonard Seabrooke
Leonard Seabrooke is a professor in International Political Economy at the Copenhagen Business School and Chief Scientist of the ENLIGHTEN (#649456) project funded by the European Commission's Horizon 2020 Framework Program.
Sarah Freitas
Sarah Freitas is a researcher at Boston University.
