Governing Finance in Europe

This chapter builds on recent work in a project funded by the Swedish Research Council on the evolution of regulatory structures in EU financial governance, which provides a comprehensive framework to investigate the dynamics leading to centralization, decentralization, and fragmentation in EU financial regulation. This generalizable theoretical account of regulatory centralization and its counterforces has been subject to an empirical assessment on the basis of major EU legislative packages in financial regulation, including the Markets in Financial Instruments Directive II (MiFID II) and capital markets union. This chapter further builds on the subsequent work, asking who benefits from the regulatory measures analysed, and how are decision-makers and stakeholders held politically and administratively accountable. The chapter focuses on all actors involved in the regulatory process: politicians and regulators, as well as market players such as investors, fund managers, and investment firms, and outlines the modes in which they are linked through various political and administrative accountability mechanisms. Its analysis of accountability channels is related to policy contents by asking whether specific regulatory objectives and results give rise to the mobilizing of available accountability channels, and whether the use of accountability channels helps improve regulatory decisions.