Civil Society And Financial Regulation: Consumer Finance Protection And Taxation After The Financial Crisis (ripe Series In Global Political Economy)

Coalitions of consumer groups, NGOs, and trade unions have traditionally been considered politically weak compared to well-organized and resourceful financial sector groups which dominate or "capture" financial regulatory decisions. However, following the 2008 financial crisis, civil society groups have been seen to exert much more influence, with politicians successfully implementing financial reform in spite of industry opposition. Drawing on literature from social movement research and regulatory politics, this book shows how diffuse interests were represented in financial regulatory overhauls in both the United States (US) and the European Union (EU). Four cases of reform in the post-crisis regulatory context are analyzed: the creation of a new Consumer Financial Protection Bureau in the US; the introduction of new consumer protection regulations through EU directives; the failure of attempts to introduce a financial transaction tax in the US; and the agreement of 11 EU member states to introduce such a tax. It shows how building coalitions with important elite allies outside and inside government helped traditionally weak interest groups transcend a lack of material resources to influence and shape regulatory policy. By engaging with a less well-known side of the debate, it explains how business power was curbed and diverse interests translated into financial regulatory policy. Cover Title Copyright Dedication Contents List of illustrations Acknowledgments List of acronyms 1 Introduction Non-financial groups and financial reforms The puzzle: why did regulatory change occur? The overall argument in brief Capture theories of financial regulatory reforms Restraining capture: salience and actor plurality The power of diffuse interests Research methods and case selection Plan of the book PART I A theory of financial regulatory change 2 Towards a causal mechanism of post-crisis regulatory reform dynamics Scope conditions: crises and limits of capture Political opportunities: access and receptivity Mobilization of diffuse interests Policy entrepreneurs Government allies Conceptualization of the causal argument Operationalization of process-tracing tests PART II The cases 3 Winner-take-all politics and diffuse interest groups: the US consumer regulator Introduction Regulatory change and group influence The legislative struggle for the CFPB Advocacy for a new consumer finance regulator Conclusions 4 Policy compromise and diffuse interests in financial regulation: EU consumer finance reforms Introduction Regulatory change and group influence Contextual conditions underlying EU financial reforms Advocacy for regulatory reform Diffuse interests, allies, and consumer protection reforms Conclusions 5 Diffuse interests and the limits of lobbying: case study of the financial transaction tax in the United States Introduction Group influence: from forbidden topic to parliamentary agenda Advocacy for an FTT Conclusions 6 Diffuse interests and the limits of capture: case study of the EU FTT Introduction Regulatory change and group influence The policy debate Advocacy for an FTT Changed contextual conditions: low-salience politics Conclusions 7 Conclusion The explanation of success Consumer finance protection Financial transaction tax Business power Return to pluralism How to mitigate capture in regulatory decision-making Limitations and future research Annexes Index "Coalitions of consumer groups, NGOs, and trade unions have traditionally been considered politically weak compared to well-organized and resourceful financial sector groups which dominate or 'capture' financial regulatory decisions. However, following the 2008 financial crisis, civil society groups have been seen to exert much more influence, with politicians successfully implementing financial reform in spite of industry opposition. Drawing on literature from social movement research and regulatory politics, this book shows how diffuse interests were represented in financial regulatory overhauls in both the United States (US) and the European Union (EU). Four cases of reform in the post-crisis regulatory context are analyzed: the creation of a new Consumer Financial Protection Bureau in the US; the introduction of new consumer protection regulations through EU directives; the failure of attempts to introduce a financial transaction tax in the US; and the agreement of 11 EU member states to introduce such a tax. It shows how building coalitions with important elite allies outside and inside government helped traditionally weak interest groups transcend a lack of material resources to influence and shape regulatory policy."--Preliminary page Analysing four cases of reform in the post-crisis regulatory context, this book shows how building coalitions with important elite allies outside and inside government helped traditionally weak interest groups transcend a lack of material resources to influence and shape regulatory policy.