Abstract
AbstractThis article shows that planning for the organization of EU banking regulation and supervision did not just appear on the agenda in recent years with discussions over the creation of the eurozone banking union. It unveils a hitherto neglected initiative of the European Commission in the 1960s and early 1970s. Drawing on extensive archival work, this article explains that this initiative, however, rested on a number of different assumptions, and emerged in a much different context. It first explains that the Commission's initial project was not crisis‐driven; that it articulated the link between monetary integration and banking regulation; and finally that it did not set out to move the supervisory framework to the supranational level, unlike present‐day developments.
Highlights
While many developments occurred in the 1990s and 2000s (Quaglia, 2010, 2007), the 2007–8 financial crisis and the current challenges of the eurozone have given much more immediate relevance to the issue of banking regulation and supervision in the single currency area (Hennessy, 2014)
The recent endeavour to create a eurozone banking union is often presented as an unprecedented step; this article contends that this is not the case, and compares and contrasts this effort with an earlier plan of the European Commission to harmonize European banking regulation and supervision
There is a common view in the literature according to which international banking regulation and supervision discussions started with the emergence of the BCBS framework in the mid-1970s (Kapstein, 1989; Schoenmaker, 2013); this view suggests that in an EU context, they only started after the 1986 Single European Act, and the subsequent liberalization of capital movements (Bach and Newman, 2007; Jabko, 2006; Posner, 2007)
Summary
While many developments occurred in the 1990s and 2000s (Quaglia, 2010, 2007), the 2007–8 financial crisis and the current challenges of the eurozone have given much more immediate relevance to the issue of banking regulation and supervision in the single currency area (Hennessy, 2014). There is a common view in the social science literature that the development of European banking regulation and supervision really started only after the 1986 SEA (Single European Act) and the subsequent legislation passed on the topic This view is understandable, since the ambitious plans presented by the Commission in the 1960s and early 1970s were premature and by and large failed. The recent endeavour to create a eurozone banking union is often presented as an unprecedented step; this article contends that this is not the case, and compares and contrasts this effort with an earlier plan of the European Commission to harmonize European banking regulation and supervision. This article focuses on banking regulation and supervision, which, as Quaglia notes (Quaglia, 2007), was much more developed than other financial services (insurance and securities) Taken together, these three aspects help shed light on current developments by re-framing them in a longer-term perspective
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