Andenas, Mads --- "Harmonising and Regulating Financial Markets" [2012] ELECD 345; in Andenas, Mads; Andersen, Baasch Camilla (eds), "Theory and Practice of Harmonisation" (Edward Elgar Publishing, 2012)

Book Title: Theory and Practice of Harmonisation

Editor(s): Andenas, Mads; Andersen, Baasch Camilla

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849800013

Section: Chapter 1

Section Title: Harmonising and Regulating Financial Markets

Author(s): Andenas, Mads

Number of pages: 29

Extract:

1. Harmonising and regulating financial
markets1
Mads Andenas2

INTRODUCTION
This chapter discusses problems of harmonisation and regulation of the European
Internal Financial Market. The argument is that the current division of powers
between the EU and Member States is not achieving sufficient harmonisation to
develop an internal market. The obstacles to the Internal Financial Market pre-
sented by national regulatory and supervisory regimes remain too high, and the
EU minimum standards and mutual recognition regime have failed to lower these
barriers sufficiently. There is a need for broader based regulatory and supervisory
institutions, undertaking at a European level what cannot effectively be done at
a national level, including providing a system for preventing and dealing with
systemic crises and risks of such crises. The European Central Bank may develop
a response to the latter, but the establishment of an EU financial market regulator
is the better solution. The chapter also addresses some of the agency problems
of the decision making process, and the crisis driven nature of regulatory reform.


1. PROBLEMS OF HARMONISATION AND REGULATION
The subject of this chapter is problems of European financial market har-
monisation and regulation. The creation of a European Financial Market has
encountered problems of two kinds. The first is that market integration has
not been very effective. The markets are divided by national borders as many

1
An earlier version of this chapter was delivered as the Annual Guido Carli Lecture
at the University of LUISS Guido Carli, Rome, in 2006.
2
MA, ...