European Financial Regulation: Levelling the Cross-Sectoral Playing Field. A Research Agenda

Abstract

Financial law as we know it today mirrors the traditional structure of the financial industry. In most legal systems, it is thus divided into banking, insurance and investment services law. In recent decades, however, the clear separation between financial sectors has gradually evaporated, as business lines have converged across sectors. Moreover, various FinTech solutions have emerged, which do not fit traditional sector boundaries. This raises the question whether a more cross-sectoral approach to financial regulation would be feasible and more efficient. The sectoral approach to financial regulation has indeed led to certain marked inefficiencies, including regulatory arbitrage. The European legislator has thus far responded by introducing a rather limited set of targeted regulatory modifications. This paper argues for a fundamental analysis of the entire body of financial regulation, in order to identify similarities and differences in regulatory approach to often very similar problems in the different sectors, and to assess the feasibility and desirability of a more cross-sectoral approach to regulation.