Rule maker or rule taker? Brexit, finance and UK regulatory autonomy
| DOI | 10.1177/0192512120967380 |
| Published date | 01 June 2022 |
| Date | 01 June 2022 |
| Author | Scott James,Lucia Quaglia |
https://doi.org/10.1177/0192512120967380
International Political Science Review
2022, Vol. 43(3) 390 –403
© The Author(s) 2020
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DOI: 10.1177/0192512120967380
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Rule maker or rule taker?
Brexit, finance and UK regulatory
autonomy
Scott James
King’s College London, UK
Lucia Quaglia
University of Bologna, Italy
Abstract
Given the integration of the City of London into the single market for financial services in the European
Union (EU), theories of transnational governance would expect the United Kingdom (UK) to favour
close regulatory alignment with the EU27 post-Brexit to maximise market access and financial stability.
Surprisingly, however, the UK has consistently demanded regulatory flexibility in financial services and has
accepted reduced market access. We argue that the explanation is twofold. First, UK preferences reflect the
need to balance the competing demands of elected officials, the financial industry and financial regulators.
Second, drawing on a bureaucratic politics perspective, we suggest that UK preferences have been strongly
shaped by the importance to UK regulators of retaining autonomy over high-status policy competences. This
article contributes to the broader literature on the politics of financial regulation by highlighting the added
value of incorporating a bureaucratic politics perspective when explaining financial regulatory preferences.
Keywords
Brexit, finance, financial regulation, city, regulators, Bank of England
Introduction
The British referendum on continuing membership of the European Union (EU) in June 2016
represented a turning point in the relationship between the United Kingdom (UK) and the EU.
The result—a small majority in favour of leaving the EU—led to the resignation of Prime Minister
David Cameron. In March 2017, the British government under Prime Minister Theresa May
Corresponding author:
Lucia Quaglia, Professor, Dipartimento Scienze Politiche, Universita’ di Bologna, Palazzo Hercolani, Strada Maggiore 45,
Bologna, 40125, Italy.
Email: lucia.quaglia@unibo.it
967380IPS0010.1177/0192512120967380International Political Science ReviewJames and Quaglia
research-article2020
Special Issue: The Brexit Effect
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