Financial Trade Associations and Multilevel Regulations

28 Pages Posted: 11 Dec 2006 Last revised: 19 Nov 2007

Date Written: July 2006


Within supranational regulatory processes there is an inevitable tension between local and supra-local interests, as there is within federal states such as the US. In their interventions in supranational and domestic regulatory processes financial trade associations often argue against local rule-making authority.

The paper focuses on two separate sets of arguments which financial trade associations employ within these multilayered regulatory processes: that domestic and regional regulators should conform their actions to the actions of regulators in other jurisdictions (harmonization rhetoric), and that proposed regulations would undermine the workings of the international financial markets (market protection rhetoric).

The paper identifies examples of uses of the harmonization and market protection rhetorics. In particular, the paper will show that financial trade associations use these rhetorical strategies with some success in the context of domestic regulation as well as in the context of supranational rule-making. In response to arguments based on harmonization rhetoric, the UK's FSA has taken on board the idea that domestic regulators should not "gold-plate" EU rules when implementing them in the UK. US banking regulators have suggested that they are conscious of the need not to impose rules on US based banks which have a negative impact on their competitiveness with banks based in other jurisdictions.

Financial trade associations in the US have invoked market protection rhetoric to argue that state predatory lending regulation threatens consumers' access to credit because it risks foreclosing opportunities for securitisation of loans. The paper argues that the invocation and acceptance of these rhetorical devices has the effect of distancing consumers from multilevel regulatory processes, and thus has implications for the legitimacy of those processes.

Keywords: financial markets, multilevel regulation, harmonization

JEL Classification: K2

Suggested Citation

Bradley, Caroline M., Financial Trade Associations and Multilevel Regulations (July 2006). University of Miami Legal Studies Research Paper No. 2007-07 , Available at SSRN: or

Caroline M. Bradley (Contact Author)

University of Miami - School of Law ( email )

P.O. Box 248087
Coral Gables, FL 33146
United States
305-284-2082 (Phone)
305-284-6506 (Fax)

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