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Dear Readers, The imposition of tight regulatory controls on banks and other financial intermediaries is a universal characteristic of modern economic systems. The frequency and intensity of legislative and administrative measures affecting financial activities demonstrate the state’s incessant concern with the way in which the market operates in this field. However, the precise perimeter of the regulated sector varies from one jurisdiction to another and changes over time. The same is true of the form and direction of the regulatory interventions. This raises important questions about the existence or otherwise of common threads –common objectives and overarching justifications– holding together…

The Evolving Nature of Financial Regulation Until the early 1970s, the various national systems of banking regulation had largely monetary objectives. Controls on commercial banking activity (including administratively set interest rates, quantitative limits on credit expansion, and reserve requirements) were imposed for the purpose of preventing the over- or under-expansion of the money and bank credit supply. In addition, in many countries, including the UK and France, the state sought to direct the flow of available credit towards certain economic areas and activities, and away from others. Another policy concern related to the conditions of competition within the banking industry;…

In the aftermath of the economic crisis, that began in 2007 in the U.S.A. and spread to the European economy, weakening the EU, every discussion about its causes and how to address them was linked to the absence of a suitable supervisory1 framework. The EU has been accused of lacking sufficient legal tools both at a precautionary level as well as for crisis management.2 Even though the internal market of financial services had been making progress, up until 2007 there were no truly centralized3 mechanisms and tools to supervise financial activities, identify their complexity, their risks and the interconnections between…