The Social Psychology of Financial Regulatory Governance

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

32 Pages Posted: 11 Jun 2019 Last revised: 23 Apr 2020

See all articles by Giuliano Castellano

Giuliano Castellano

The University of Hong Kong, Faculty of Law

Genevieve Helleringer

University of Oxford - Institute of European and Comparative Law; ESSEC Business School; European Corporate Governance Institute (ECGI)

Date Written: June 11, 2019

Abstract

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

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

Giuliano Castellano (Contact Author)

The University of Hong Kong, Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

Genevieve Helleringer

University of Oxford - Institute of European and Comparative Law ( email )

St Cross Building
St Cross Road
Oxford, OX1 3UL
United Kingdom

ESSEC Business School ( email )

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CS 50105 CERGY
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France

European Corporate Governance Institute (ECGI) ( email )

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1000 Brussels
Belgium

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