The Social Psychology of Financial Regulatory Governance

This paper contributes to addressing a fundamental question: how do institutions, in general, and financial regulators, in particular, “think”? To this end, the analytical tools of social psychology are applied to the regulatory framework for financial services in the European Union. The paper reveals a relationship between the constitutional status of EU regulators and the dominant group dynamics typified in the literature of social psychology. Such a relationship indicates that institutional structures might favour the emergence of specific behavioural patterns and modus operandi within regulatory bodies. Furthermore, the identification of dominant group dynamics paves the way to a more profound understanding of conflictual dynamics within groups of decision-makers. Such a novel analytical map is, then, applied to the context of the ongoing debate as to whether, following Brexit, the decision-making process of EU regulators is poised to be marked by a divide separating eurozone and non-eurozone Member States.

Keywords: Financial Regulation, Regulatory Governance, EU, Common Interest, ESAs, ECB, Commission, Colleges of Supervisors, Eurozone, Collective Decision Making, Cooperation, Forms of Sociality, Social Behaviours, Social Norms, Sociology of Finance, Public Organisations

JEL Classification: K22, K23, K33, D70, D73, D78, F15, F55, F65, G18, G28, N24, Z13

Suggested Citation: Suggested Citation

Castellano, Giuliano and Helleringer, Genevieve, The Social Psychology of Financial Regulatory Governance (June 11, 2019). The Political Economy of Financial Regulation (E Avgouleas and DC Donald, eds., Cambridge University Press 2019), Oxford Legal Studies Research Paper No. 47/2019, AIIFL Working Paper No. 34, ECGI - Law Working Paper , University of Hong Kong Faculty of Law Research Paper No. 2020/011, Available at SSRN: https://ssrn.com/abstract=3402265 or http://dx.doi.org/10.2139/ssrn.3402265