A globalization laboratory: European banking regulation and global capitalism in the 1970s and early 1980s

Abstract

ABSTRACTThe 1970s are often portrayed as the beginning of a new era of finance capitalism. The growth and internationalization of banks’ balance sheets, together with the return of banking crises, were important changes during the decade, and for the global evolution of capitalism. How did banking regulation and supervision react to this evolving environment? The literature places considerable emphasis on the role of the United States and, to a lesser extent, of the United Kingdom and Japan, in the emergence of global standards in banking regulation and supervision, and neglects the influence of the European Economic Community (EEC). Based on the archives of central banks, international organisations and one bankers’ association, this article explores the relationships between the European and global discussions in the early history of international banking regulation and supervision. It contends that the EEC played a more important role in the first steps of international banking regulation and supervision than commonly considered in the literature. The article further argues that European integration served as a globalization laboratory in the field of banking regulation and supervision. Accordingly, the EEC used capitalism to foster its integration agenda but was soon overtaken by it.