The “Europeanization” of the Basel process: Financial harmonization between globalization and parliamentarization

Abstract

Abstract Public policy initiatives aimed at the prevention of future financial crises originate with global harmonization in the form of executive standards issued by theBaselCommittee onBankingSupervision. This article explores the role of theEuropeanParliament (EP) in the process of adapting the standards in European Union legislation passed in 2013 as theCapitalRequirementsRegulation/CapitalRequirementsDirectiveIV. Unlike accounts casting theEPas increasingly dependent upon outside sources in order to meet its enhanced legislative role, we find it increasingly dexterous in developing and using in‐house policy ideas, expertise, and not least a common sense of institutional purpose. NotableEPsuccesses in final legislation include (but are not restricted to) a headline cap on bankers' bonuses in the face of entrenched business and national interests. The argument is developed by drawing upon a broad range of interviews together with other primary and secondary sources, tracing the contribution of theEPfrom the early stages of agenda‐setting through to the development of an“esprit de corps”among the committee lead team which survived intact throughout the “black box” of trilogue negotiations. Besides illuminating the notoriously opaque trilogue process, the analysis also contributes to contemporary debates about whether theEP's increased legislative powers are resulting in a shift away from its traditional allegiances with diffuse interests toward a greater engagement with producer sources in order to fulfill requirements for policy expertise.

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