Relative authority in global and EU financial regulation: linking the legitimacy debates

Financial regulation appears as a polycentric, highly fragmented regime. At the global level, transnational regulatory networks set standards for banking, securities and insurance. Within the complex financial regulatory architecture established in the EU in the aftermath of the crisis, the public authority of EU bodies is relative not only horizontally (because of the number of EU actors intervening in financial regulation), but also vertically, as limited by global regulators. The focus on the interplay between global and EU regulation helps to address the legitimacy gaps emerging both at the global and at the EU level. First, the new EU financial architecture—as for some of its specific institutional features—can provide lessons for the global financial architecture, hence contributing to fostering its legitimacy. Second, shedding light on the impact of global regulators within the EU shifts the terms of the debate on the legitimacy of the EU bodies themselves. If the activity of the latter is effectively shaped by global regulation, then efforts intended to ensure that EU agencies’ activity is legitimate need to extend accordingly. From this perspective, the analysis attempts to complement the debate on the legitimacy of EU regulators.