Diverging Capitalisms? Britain, the City of London and Europe

On 28th October Prof Lucia Quaglia will speak at the workshop  'Diverging Capitalisms, Part 2: Brexit and the new EU economic governance' at the Policy Network, London. This workshop is the second of a series of four events organised as part of the project ‘Diverging Capitalisms? Britain, the City of London and Europe’, which is a joint venture between FEPS (Foundation for European Progressive Studies, Brussels), Policy Network, and SPERI (Sheffield Political Economy Research Institute, University of Sheffield). For more information see http://speri.dept.shef.ac.uk/events/diverging-capitalisms-part-2/.

Lucia's paper on 'European Union Financial Regulation, Banking Union, Capital Markets Union and the United Kingdom'  will examine post-crisis reforms in these policy areas by focusing on the preferences and influence of the United Kingdom (UK) in the policy process. It is argued that the UK has played a variety of roles – ‘foot-dragger’, ‘fence-sitter’ and ‘pace-setter’ - in the policies under discussion. The (at times considerable) British influence was geared towards the attainment of preferences that were shaped by domestic politics and political economy, first and foremost the interests of the financial services industry and the City of London.

Lucia Quaglia hints at “a convoluted decision-making process” on banking resolution

Speaking on the sidelines of a talk given at Scuola Normale Superiore in Palazzo Strozzi (Florence), Lucia Quaglia, Professor of Political Science at the University of York (UK) reviewed the entangled governance of the Single Resolution Mechanism (SRM), and stressed that ‘the most convoluted part of the process is how to take decisions within the Single Resolution Board’. More specifically, Quaglia pointed at the number of policy actors involved in the process and concluded that, going forward, there could be some ‘lack of clarity as to who is responsible’.

Professor Quaglia also examined the intricacies of the UK’s position on the EU Banking Union. Going beyond the obvious political reason why the UK is not part of the Banking Union (the UK decided not to join EMU in 1999), she also underscored the chief importance of economic factors and in particular the structure of the EU banking system in explaining the reluctance of the UK to join the SRM: the UK’s banking system ‘is a system that is very internationalized rather than just Europeanized’.

Putting things in the larger perspective of open economies facing interdependence pressures, Lucia Quaglia went on and explained that ‘by and large, all countries regardless whether they are in the euro area or even in the European Union, face what some economists call a financial trilemma, between the stability of the financial sector, international financial integration and national policies for the regulation, resolution and supervision of banks’. An additional constraint for euro area countries, she added, is that ‘the lender of last resort is no longer at the national level but hasn’t really been moved to the EU level’.

See the full interview here: http://fbf.eui.eu/lucia-quaglia-hints-at-a-convoluted-decision-making-process-on-banking-resolution/