2. Agencies in European Banking: Establishing the Theoretical Framework

Although they are also “centralized in the sense that an agency is a central Community point of decision, contrary to the situation with one body in each Member State” (Euréval 2008, p. 92).

It is interesting to note that Busuioc (2013b, p. 25) presents a valid objection to the argument of agencies reducing the Commission’s workload, as she notes that the increase in the number of agencies and their administrative capacity has not been met with a “parallel decrease in either the Commission’s staff or budget”.

Regulation (EU) No 1093/2010, OJ L 331/12, 15.12.2010; Regulation (EU) 1094/2010, OJ L 331/48, 15.12.2010; Regulation (EU) 1095/2010, OJ L 331/84, 15.12.2010.

Namely, the authority’s interventionist powers in the financial markets in regard to short-selling and credit default swaps.

See, for instance, the discussion in Chap. 4, Sect. 4.2.

“Consistent convergence” can best be understood in relation to agencies’ overall mission of promoting policy (or regulatory) consistency among EU countries, by allowing various national preferences to be confronted, appraised, reconciled and converged within a commonly agreed, congruent EU policy (regulatory) output. For instance, when analysing convergence of MS’ heterogenous regulatory policy in the securities market, Chiu points out (2008, p. 239) that agencification could achieve the best results in terms of consistency: “Institutionalization brings about a process whereby political actors are co-opted in the playing out of political forces in the EU. However, the institution is able to direct such forces according to its processes and norms to effect the shaping of a congruent policy”. Furthermore, “the agency is arguably essential to secure the regulatory convergence desired (…) and such agencification could arguably be designed to be in line with the constitutional tenent of proportionality” (Ibidem, p. 241).

The RCI perspective argues that NCAs’ policy stances will present a compromise between the wider, national interest (which keeps account of different societal preferences as articulated within the MS’ economic policy) and the regulator’s interest based exclusively on its technocratic expertise. This is because NCAs operate as mere facilitators to the exchange of views among numerous stakeholders, facilitating the articulation of commonly agreed positions (or preferences) that are still determined under the influence of the most powerful stakeholder, typically the one that stands in close contact with the government (Moravcsik 1993, p. 483), for instance banking industry representatives. To an extent, this argument is also relevant to the HI reasoning behind NCAs’ preference formation, since it suggests that “genuine” national preferences are rather difficult to pinpoint, as they transform under the influence of different lobbying mechanisms that allow relevant actors to embed their own preferences therein.

Foreign ownership in post-transition economies is at very high levels from a pan-European perspective. Research conducted by Raiffeisen Bank notes that “In Central Europe the average foreign ownership ratio stood at some 70% (…) In SEE, the average foreign ownership ratio is even higher and stood at some 84% at year-end 2015. Intra-EU integration in banking remains much more advanced in EU countries in the CE/SEE region compared to Western European standards” (2016, p. 6).

Egeberg and Trondal (2016, p. 6) also find that “delegates from old and particularly affected member states, as well as those emanating from well-resourced administrations, seem to be considerably more engaged than others”.

The phenomenon of “revolving doors” in financial regulation refers to the possibility of former government employees (those coming from national regulatory authorities) later becoming private sector officials, therefore exploiting their knowledge about the regulator, as well as network of contacts, to the benefit of their new employer.

An authority’s institutional power can, for instance in banking regulation, mean that NCAs in charge of technically complex and politically contested issues (such as macroprudential supervision) will seek to facilitate decision-making and thus be more inclined to centralization of policy-making procedures (Lombardi and Moschella 2016, p. 467).

For instance, once outside the EU and therefore technically a “third-country”, will the UK continue to participate in the work of EU agencies? In the event that it does choose to participate (as this is already possible for some countries in the European Economic Area), will the role of the UK be cooperative or competitive? If it opts for cooperation, will it continue on its path of critically assessing agencies’ policy solutions coalescing more with policy preferences advocated by non-Euro area countries or will it assert its own, distinct position?