Skip to main content
×
×
Home

When Banks Lobby: The Effects of Organizational Characteristics and Banking Regulations on International Bank Lobbying

  • Adam William Chalmers
Abstract

This article examines bank lobbying in the Basel Committee on Banking Supervision (BCBS). While excessive bank lobbying is routinely linked to weakened banking regulations, we still know little about bank mobilization patterns. In particular, when and why do some banks lobby the BCBS while others do not? I argue that the decision to lobby is a function of two factors: banks’ organizational characteristics and domestic banking regulations. I test my argument using a unique dataset of over 33,000 banks worldwide during the period in which Basel III was negotiated. My findings confirm a pronounced bias in bank mobilization patterns toward wealthy, internationally active banks. I also find that banks facing more stringent banking regulations at home tend to lobby the BCBS in an effort to level the playing field with international competitors. This effect is particularly salient for stringent regulations on banking activities as well as higher capital adequacy requirements. 1

  • View HTML
    • Send article to Kindle

      To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle. Find out more about sending to your Kindle.

      Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

      Find out more about the Kindle Personal Document Service.

      When Banks Lobby: The Effects of Organizational Characteristics and Banking Regulations on International Bank Lobbying
      Available formats
      ×
      Send article to Dropbox

      To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Dropbox.

      When Banks Lobby: The Effects of Organizational Characteristics and Banking Regulations on International Bank Lobbying
      Available formats
      ×
      Send article to Google Drive

      To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Google Drive.

      When Banks Lobby: The Effects of Organizational Characteristics and Banking Regulations on International Bank Lobbying
      Available formats
      ×
Copyright
Corresponding author
* Corresponding author: Adam William Chalmers, King's College London, European and International Studies, Virginia Woolf Building, 22 Kingsway, London WC2B 6LE. Email: adam.chalmers@kcl.ac.uk
References
Hide All
Allison, Paul. 2012. “Logistic Regression for Rare Events.” Statistical Horizons. Available at: http://statisticalhorizons.com/logistic-regression-for-rare-events (Accessed November 6, 2015).
Baker, Andrew. 2010. “Restraining regulatory capture? Anglo-America, crisis politics and trajectories of change in global financial governance.” International Affairs 86 (3): 647663.
Baker, Andrew. 2013. “The gradual transformation? The incremental dynamics of macroprudential regulation.” Regulation and Governance 7 (4): 417434.
Barth, James R., Caprio, Garth Jr and Levine, Ross. 2006. Rethinking Bank Regulation: Till Angels Govern. Cambridge: Cambridge University Press.
Baumgartner, Frank R. and Leech, Beth L.. 1998. Basic Interests: The Importance of Groups in Politics and in Political Science. Princeton, NJ: Princeton University Press.
BCBS. 2009. “Strengthening the Resilience of the Banking Sector.” Available at: http://www.bis.org/publ/bcbs164.htm (Accessed April 15, 2015).
Beyers, Jan and Kerremans, Bart. 2012. “Domestic Embeddedness and the Dynamics of Multilevel Venue Shopping in Four EU Member States.” Governance: An International Journal of Policy, Administration, and Institutions 25 (2): 263290.
Bhattacharya, Kaushik. 2003. “How good is the BankScope database? A cross-validation exercise with correction factors for market concentration measures.” Working Paper 133. B. f. I. Settlements: Bank for International Settlements.
BIS. 2008. “Annual Report.” Basel: Bank of International Settlements.
Braithwaite, John and Drahos, Peter. 2000. Global Business Regulation. Cambridge: Cambridge University Press.
Braun, Matias and Raddatz, Claudio. 2010. “Banking on Politics: When Former High-Ranking Politicians Become Bank Directors.” The World Bank Economic Review 24 (2): 234279.
Carpenter, Daniel and Moss, David A.. ed. 2014. Preventing Regulatory Capture: Special Interest Influence and How to Limit it. Cambridge: Cambridge University Press.
Cerny, Philip. G. 1994. “The Dynamics of Financial Globalization: Technology, Market Structure, and Policy Response.” Policy Sciences 27 (4): 319342.
Chalmers, Adam. W. 2014. “In over their heads: Stakeholder involvement and legislative duration in the European Union.” European Union Politics 15 (4): 895–613.
Chalmers, Adam. W. 2015. “Financial Industry Mobilization and Securities Markets Regulation in Europe.” European Journal of Political Research 24 (3): 482501.
Claessens, Stijn, Underhill, Geoffrey R. D. and Zhang, Xiaoke. 2008. “The Political Economy of Basle II: The Costs for Poor Countries.” World Economy 31 (3): 313460.
Cunningham, Alastair. 2001. “Assessing the stability of emerging market economies’ banking systems.” Financial Stability Review 11: 187192.
Davies, Howard and Green, David. 2008. Global Financial Regulation: The Essential Guide. Cambridge: Polity Press.
De Hass, Ralph, Ferreira, Daniel and Taci, Anita. 2010. “What determines the composition of banks' loan portfolios? Evidence from transition countries.” Journal of Banking and Finance 34: 388398.
de Larosiere, Jacques. 2009. “The High Level Group on Financial Supervision in the EU” (pp. 1–85). Brussels. Available at: http://ec.europa.eu/internal_market/finances/docs/de_larosiere_report_en.pdf (Accessed June 23, 2014).
Drezner, Daniel W. 2007. All Politics is Global: Explaining International Regulatory Regimes. Princeton, NJ: Princeton University Press.
Firth, David. 1993. “Bias Reduction of Maximum Likelihood Estimates.” Biometrika 80 (1): 2738.
Flanagan, Robert J. 2006. Globalization and Labor Conditions. Oxford: Oxford University Press.
Fries, Steven and Taci, Anita. 2005. “Cost efficiency of banks in transition: Evidence from 289 banks in 15 post-communist countries.” Journal of Banking and Finance 29 (8–9): 5581.
FSA. 2009. “The Turner Review: A Regulatory Response to the Global Banking Crisis” (pp. 1126): Financial Services Agency.
Gambacorta, Leonardo. 2005. “Inside the bank lending channel.” European Economic Review 49 (7): 17371759.
Genshel, Philip and Plümper, Thomas. 1997. “Regulatory Competition and International Co-operation.” Journal of European Public Policy 4 (4): 626–42.
Goldbach, Roman. 2015. “Asymmetric influence in global banking regulation. Transnational harmonization, the competition state, and the roots of regulatory failure.” Review of International Political Economy 22 (6): 10871127.
Goldbach, Roman. 2015a. Global Governance and Regulatory Failure: The Political Economy of Banking. New York: Palgrave Macmillan.
Goldin, Ian and Vogel, Tiffany. 2010. “Global Governance and Systemic Risk in the 21st Century: Lessons from the Financial Crisis.” Global Policy 1 (1): 415.
Goodhart, Charles. 2011. The Basel Comittee on Banking Supervision: A History of the Early Years 1974–1997. Cambridge: Cambridge University Press.
Griffith-Jones, Stephany and Persaud, Avinash. 2003. “The political economy of Basel II and implications for emerging economies.” Paper presented at the Economic Commission of Latin America, Santiago, Chile.
Griffith-Jones, Stephany and Persaud, Avinash. 2008. “The Pro-cyclical Impact of Basel II on Emerging Markets and its Political Economy.” In Capital Market Liberalization and Development, edited by Stigliz, Joseph and A, Jose. Ocampo. Oxford: Oxford University Press.
Helleiner, Eric and Porter, Tony. 2009. “Making Transnational Networks More Accountable.” Re-Defining the Global Economy 42: 14–24, edited by Sara Burke. New York: Friedrich Ebert Stiftung Occassional Paper.
Hellwig, Martin. 2010. “Capital regulation after the crisis: Business as usual?Preprints of the Max Planck Institute for Research on Collective Goods: 121.
Holzinger, Katharina, Knill, Christoph and Sommerer, Thomas. 2008. “Environmental Policy Convergence: The Impact of International Harmonization, Transnational Communication, and Regulatory Competition.” International Organization 62 (4): 553–88.
Igan, Deniz, Mishra, Prachi and Tressel, Thierry. 2009. “A Fistfull of Dollars: Lobbying and the Financial Crisis.” Working Paper WP/09/287. Washington, DC.: International Monetary Fund.
IMF. 2009. “Initial Lessons of the Crisis.” Washington, DC.: International Monetary Fund.
Johnson, Simon and Kwak, James. 2010. 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown. New York: Random House.
Kapstein, Ethan. 1989. “Resolving the regulator's dilemma: International coordination of banking regulations.” International Organization 43 (2): 323347.
Keck, Margaret E. and Sikkink, Kathryn. 1998. Activists beyond Borders: Advocacy Networks in International Politics. Ithaca, NY: Cornell University Press.
King, Gary and Zeng, Langche. 2001. “Logistic Regression in Rare Events Data.” Political Analysis 9: 137163.
Klüver, Heike. 2013. Lobbying in the European Union: Interest Groups, Lobbying Coalitions, and Policy Change. Oxford: Oxford University Press.
Koenig-Archibugi, Mathias. 2012. “Global Regulation.” The Oxford Handbook of Regulation, edited by Baldwin, Robert, Cave, Martin and Lodge, Martin. Oxford: Oxford University Press.
Lall, Ranjit. 2012. “From failure to failure: the politics of international banking regulation.” Review of International Political Economy 19 (4): 609638.
Leitgöb, Heinz. 2013. “The Problem of Modeling Rare Events in ML-based Logistic Regression—Assessing Potential Remedies via MC Simulations.” Paper presented at the European Survey Research Association, Ljubljana.
Mahoney, Christine. 2004. “The Power of Institutions. State and Interest Group Activity in the European Union.” European Union Politics 5(4): 441466.
Marks, Gary and McAdam, Doug. 1996. “Social movements and the changing structure of political opportunity in the European Community.” West European Politics 18 (2): 249278.
Mattli, Walter and Woods, Ngaire. 2009. “In whose benefit? Explaining regulatory change in global politics.” The Politics of Global Regulation, edited by Mattli, Walter and Woods, Ngaire. Princeton, NJ: Princeton University Press.
McKeen-Edwards, Heather and Porter, Tony. 2013. Transnational financial associations and the governance of global finance. London: Routledge.
Moschella, Manuela and Tsingou, Eleni. 2013. “Regulating finance after the crisis: Unveiling the different dynamics of the regulatory process.” Regulation and Governance 7 (4): 407416.
North, Douglas. 1990. Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.
Oatley, Thomas and Nabors, Robert. 1998. “Redistributive Cooperation: Market Failure, Wealth Transfers, and the Basle Accord.” International Organization 52 (1): 3554.
Ocampo, Jose A. 2009. “7-Point Plan for Development-Friendly Reform.” Re-Defining the Global Economy, edited by Burke, Sara. New York: Friedrich Ebert Stiftung.
Pagliari, Stefano and Young, Kevin L.. 2014. “Leveraged interests: Financial industry power and the role of private sector coalitions.” Review of International Political Economy 21 (3): 575610.
Pagliari, Stefano and Young, Kevin L.. 2016. “The interest ecology of financial regulation: interest group plurality in the design of financial regulatory policies.” Socio-Economic Review 14 (2): 129.
Porter, Tony. 2009. “Why International Institutions Matter in the Global Credit Crisis.” Global Governance 15 (1): 38.
Prakash, Aseem and Potoski, Matthew. 2006. “Racing to the Bottom? Trade, Environmental Governacne, and ISO 14001.” American Journal of Political Science 50 (2): 350–64.
Rasmussen, Anne and Carroll, Brendan. 2014. “Determinants of Upper-Class Dominance in the Heavenly Chorus: Lessons from European Online Consultations.” British Journal of Political Science 44 (2): 445459.
Schattschneider, Elmer. E. 1975. The semisovereign people: A realist's view of democracy in America. Hinsdale, IL Dryden Press.
Simmons, Beth A. 2001. “The International Politics of Harmonization: The Case of Capital Market Regulation.” International Organization 55 (3): 589620.
Singer, David A. 2007. Regulating Capital. Setting Standards for the International Financial System. Ithaca: Cornell University Press.
Stigler, George J. 1971. “The Theory of Economic Regulation.” The Bell Journal of Economics and Management Science 2 (1): 321.
Tarullo, Daniel K. 2008. Banking on Basel: The Future of International Financial Regulation. New York: Peterson Institute.
Tsingou, Eleni. 2010. “Regulatory Reactions to the Global Credit Crisis: Analyzing a Policy Community Under Stress.” The Politics of International Regulatory Change, edited by Helleiner, Eric and Pagliari, Stefano. London: Routledge.
Underhill, Geoffrey R. D., Blom, Jasper and Mügge, Daniel. 2010. Global Financial Regulation, Thirty Years On. Cambridge: Cambridge University Press.
Underhill, Geoffrey R. D. and Zhang, Xiaoke. 2008. “Setting the rules: private power, political underpinnings, and legitimacy in global monetary and financial governance.” International Affairs 84 (3): 535554.
Vogel, David. 1995. Trading Up: Consumer and Environmental Regulation in a Global Economy. Cambridge: Cambridge University Press.
Woll, Cornelia. 2014. The Power of Inaction: Bank Bailouts in Comparison. Ithaca, NY: Cornell University Press.
Wood, Duncan. 2005. Governing Global Banking: The Basel Committee and the Politics of Financial Globalization. Aldershot: Ashgate.
Yackee, Susan W. and Yackee, Jason W.. 2006. “A Bias Toward Business? Assessing Interest Group Influence in the U.S. Bureaucracy.” Journal of Politics 68 (1): 128–39.
Young, Kevin L. 2011. “The Basel Committee on Banking Supervision.” In Handbook of Transnational Governance: Institutions & Innovations, edited by Hale, T. and Held, D.. Cambridge: Polity Press.
Young, Kevin L. 2012. “Transnational regulatory capture? An empirical examination of the transnational lobbying of the Basel Committee on Banking Supervision.” Review of International Political Economy 19 (4): 663688.
Young, Kevin L. 2013. “Financial industry groups' adaption to the post-crisis regulatory environment: Changing approaches to the policy cycle.” Regulation & Governance 7 (4): 460480.
Young, Kevin L. 2014. “Losing abroad but winning at home: European financial industry groups in global financial governance since the crisis.” Journal of European Public Policy 21 (3): 367388.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Business and Politics
  • ISSN: -
  • EISSN: 1469-3569
  • URL: /core/journals/business-and-politics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×
Type Description Title
PDF
Supplementary materials

Chalmers supplementary material
Online Appendix

 PDF (378 KB)
378 KB

Metrics

Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed