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The EU's Decision TrapsComparing Policies$
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Gerda Falkner

Print publication date: 2011

Print ISBN-13: 9780199596225

Published to Oxford Scholarship Online: September 2011

DOI: 10.1093/acprof:oso/9780199596225.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 03 August 2021

Financial Market Regulation

Financial Market Regulation

A ‘Lamfalussy Exit’ from the Joint-Decision Trap

Chapter:
(p.73) 5 Financial Market Regulation
Source:
The EU's Decision Traps
Author(s):

Zdenek Kudrna

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199596225.003.0005

The joint-decision trap complicates the adoption of financial market regulations in the EU. This chapter examines the capacity of the Lamfalussy procedure to provide an exit from the trap by supporting complex, yet consistently enforceable, technical compromises. The member states' preferences over key regulatory measures remain divided and tend to split them into two equally sized policy coalitions. In the case of the 1993 Investment Services Directive, the contested compromises proved too ambiguous to be enforced consistently across the EU. In 2001, the EU introduced the Lamfalussy procedure that delegated certain rule-making and monitoring powers to technocratic committees. As a result, the recent regulations, such as the 2004 Market in Financial Instruments Directive, are based on more complex technical compromises that are expensive to implement but can be monitored and enforced consistently, thus supporting EU regulatory integration.

Keywords:   EU decision-making, financial services, regulation, Lamfalussy procedure, Market in Financial Instruments Directive

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