Regulation of the financial sector in the light of the global economic crisis : an EU perspective

Abstract

Ever since the global economic crisis was triggered in 2006, an important and necessary debate commenced regarding the causes of the crisis, the lessons that have been learnt and of course how the system should be modified in order to prevent or at the least limit future crises. This debate has been particularly controversial within the EU, as policymakers, technocrats and industry representatives discussed the extent to which regulation and supervision is necessary as well as how such measures should be implemented. It cannot be denied that the mounting pressure from the electorate played a fundamental role in encouraging policymakers to take the initiatives that have been discussed herein. This has prompted critics to question whether the industries that have been targeted are simply scapegoats to offset such pressure. Such proponents go so far as to claim that a periodic crash could be perceived as part of the economic cycle that will occur, with or without regulation and supervision in place. This thesis focuses on the most current of the post-crisis initiatives at EU level which include the European Supervisory Package, the Credit Rating Agencies Regulation, amendments made to CRD as well as the proposed Alternative Investment Fund Managers Directive. An analysis of the industries involved in the context of regulation together with a thorough and current assessment of the EU proposals enables one to come to some conclusions regarding the potential efficacy of such proposals and whether the delicate balancing act of not stifling the industry on the one hand and protecting EU markets on the other, has been struck.