Setting the pace? Private financial interests and European financial market integration

The regulation and supervision of financial services in the EU has undergone significant change between 2000 and 2005, when the so-called Lamfalussy framework, the Basel 2 agreement and its transposition into the Capital Requirement Directive were agreed. This research examines the preferences of national financial interest groups, the independent variable, in shaping national input and more precisely, the contributions given by the relevant public authorities, into EU and international policy-making processes (the dependent variable). The impact, if any, on the final outputs (the relevant international and EU agreements) is also discussed.
The empirical research presented in this paper focuses on the UK and Germany, which, besides being two of the largest countries in the EU, have been crucial players in the reforms under consideration. The interest groups studied are those in the banking sector, and it is important to
distinguish between the level of involvement each interest group has and their degree of influence in policy making processes. The former depends on the policy content, namely, whether the policy concerns a broad institutional issue or specific rules, whilst the latter depends on domestic institutions, namely state structure, interest representation and political economy institutions.