Introduction

Abstract

Abstract Chapter 1 begins by introducing the puzzle of bank structural reform. In the wake of the global financial crisis, the problem of too-big-to-fail banks proved to be one of the most difficult and divisive to resolve. Unlike most areas of post-crisis banking regulation, there was little attempt to coordinate efforts to address the issue through bank structural reform—namely, restrictions on banks’ ability to engage in higher-risk trading activities through structural separation and/or prohibitions on proprietary trading. The central aim of the book is to understand why six jurisdictions with banking systems that are among the world’s largest pursued such divergent approaches, despite significant political pressures to engage in structural reform. The chapter reviews the important similarities and differences across our six cases—the US, UK, EU, France, Germany, and the Netherlands—to justify our comparative method. Next it summarizes the limitations of existing scholarship in this area as a justification for the book. The chapter then assesses alternative explanations rooted in political economy and political science, concluding that none provides an adequate account of regulatory variation in bank structural reform. The final sections provide a detailed summary of our argument, explain the rationale for the book, and include an overview of the structure.