Strategic Behaviour and Crisis-Driven Change in Regulation and Governance of the European Financial and Economic System: From Networks to Hybrids

Jerusalem Papers in Regulation & Governance Working Paper No. 63

24 Pages Posted: 11 Aug 2015

See all articles by Martijn L. P. Groenleer

Martijn L. P. Groenleer

Tilburg University, Tilburg Law School, Department of Law and Governance, Tilburg Center for Regional Law and Governance

Arnout Mijs

Netherlands Institute of International Relations - Clingendael

Ernst ten Heuvelhof

Delft University of Technology

Bert van Meeuwen

Delft University of Technology

Jessica van der Puil

Delft University of Technology

Date Written: March 2014

Abstract

A key challenge that European decision-makers struggle with today is regulating and governing the European financial and economic system in a way that is both effective and legitimate. To help address this challenge, this paper asks why regulatory gaps occurred and European governance has been weak, and how these gaps and weaknesses allowed risky behaviour. It then scrutinizes the regulatory governance structures that have emerged in response, particularly at the EU level, to coordinate the financial and economic system. Two illustrative cases are examined: self-regulation by and national supervision of banks and ‘decentred’ fiscal policy coordination by eurozone countries. We point to strategic behaviour as a key driver of the crisis. We also argue that changes in regulatory governance to curb such behaviour have entailed introduction of some form of hierarchy at the supranational level, yet still combined with strong network characteristics, thus creating or strengthening hybridity in regulatory governance.

Keywords: Agencies, coordination and decision-making processes, financial and economic system, governance, hierarchies, hybrids, networks, (self-)regulation, strategic behaviour

Suggested Citation

Groenleer, Martijn L. P. and Mijs, Arnout and ten Heuvelhof, Ernst and van Meeuwen, Bert and van der Puil, Jessica, Strategic Behaviour and Crisis-Driven Change in Regulation and Governance of the European Financial and Economic System: From Networks to Hybrids (March 2014). Jerusalem Papers in Regulation & Governance Working Paper No. 63, Available at SSRN: https://ssrn.com/abstract=2448280 or http://dx.doi.org/10.2139/ssrn.2448280

Martijn L. P. Groenleer (Contact Author)

Tilburg University, Tilburg Law School, Department of Law and Governance, Tilburg Center for Regional Law and Governance ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Arnout Mijs

Netherlands Institute of International Relations - Clingendael

PO Box 93080
2509 AB The Hague
Netherlands

Ernst Ten Heuvelhof

Delft University of Technology ( email )

Stevinweg 1
Stevinweg 1
Delft, 2628 CN
Netherlands

Bert Van Meeuwen

Delft University of Technology

Stevinweg 1
Stevinweg 1
Delft, 2628 CN
Netherlands

Jessica Van der Puil

Delft University of Technology ( email )

Stevinweg 1
Stevinweg 1
Delft, 2628 CN
Netherlands

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