The Politics of ‘Third Country Equivalence’ in Post-Crisis Financial Services Regulation in the European Union

Abstract

After the global financial crisis, the European Union has adopted a new regulatory approach towards foreign countries by making use of equivalence rules in finance. Why? This paper argues that it is the EU’s attempt to restore financial stability in its territory and maintain the competitiveness of its financial industry. However, this ‘old’ dilemma between stability and competition in financial regulation is further complicated in a regional jurisdiction, such as the EU, because different regulatory paradigms play off in the dilemma.