Financial market regulation: still a regime removed from politics?

Abstract

Financial market policies and regulation are inherently political issues, the implications of which run wider from markets themselves and their robustness or fragility, to encompass questions of political authority (technocrats or politicians?). Yet, in the long run-up to the financial crisis beginning in 2007, the governance of financial markets was accepted as being ‘beyond’ democratic direction. The first objective of this chapter is to explore aspects of de-democratisation, as it emerged historically in the UK and became a model for the EU. The second objective is to ask whether the crisis provided an opportunity to extend the perimeter of democracy to cover questions of the design of financial markets, or whether the converse occurred. A final objective is to think about the (potentially diverse) normative stances that might be taken within financial markets, and within international regulatory networks, vis-a-vis the prospect of democratic control. An important proviso is that it is not the purpose of the paper to argue for ‘more regulation’, or for ‘less’, indeed it is argued that the posing of regulatory questions in more or less terms obscures the more important underlying issue of ‘regulation by whom’.