Europe's Role in Global Financial Governance - Historical Lessons and Future Outlook

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GR:EEN Policy Brief 29
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Since its beginnings in the 1950s, European integration has been transforming the member states of  the  European Union (EU).  As  the  so-called euro - crisis forcefully revealed,  one of  the most consequential dimensions of  European  integration has been  in  finance — the markets themselves and the design and enforcement of the rules governing them. Even as national borders continue to shape European financial  markets and their governance, Brussels has become the undisputed hub of financial regulation in Europe.

The concentration of competencies in  Brussels and the attendant expansion and ‘modernization’ of European  financial  markets  have not  only  left  their mark on the social and economic fabric of European  societies.  The  EU  has also acquired  sufficient  market  size and  regulatory capacity  to end  the unchallenged domination of global  financial  governance by the USA.  EU  financial regulation  and  integration had  historically  evolved  in  the  shadow  of  global  developments and initiatives,  for  example,  the  Basel  accord  on  capital  requirements.  But  certainly  since  the  2000s, Brussels has started to ‘talk back’ — both to EU member states haggling over EU financial rules and to organizations and governments outside the EU, whose policies it increasingly shapes.

As extra-European initiatives inform the development of European rules and vice versa,  neither can be fully understood  without  a  consideration  of  the  other.  But practitioners  and  scholars  have had  nowhere  to turn to  for a  systematic  charting  and   analysis  of  these  ‘European – global relationships’  — their history, their current shape as they cut across different levels of governance, and their implications for furture policy, global rule coherence, and European influence.