Annals of the Fondazione Luigi Einaudi

An Interdisciplinary Journal of Economics, History and Political Science

The Annals is a forum for the free exchange of ideas
among scholars working in the field of social sciences
Volume LIII 2 - 2019

The UK as a Conflicted Pacesetter in Trading Up Post-crisis International Derivatives Regulation

Scott James and Lucia Quaglia,
pp. 229-246
10.26331/1092,
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ABSTRACT

The United Kingdom (UK) hosts a leading international financial centre and has a large financial sector. This jurisdiction has traditionally been very influential in international standard-setting bodies in finance. Whereas prior to the international financial crisis, the UK was often keen to ‘trade-down’ international standards, after the crisis, the UK has pursued increasingly stringent financial regulation in certain financial sectors, such as derivatives. What accounts for this ‘trading up’ approach? In order to address this question, we adopt a two-step analytical framework. The first step examines the process of national preference formation by identifying three sets of key domestic players: elected officials (namely, government ministers and members of parliament); unelected officials (central bankers and financial regulators); and the financial industry. The second step explains the UK’s regulatory strategies and influence over regulatory outcomes at the international level.