The Role of “Wise Men”: the European Commission’s Use of Ad Hoc Expert Groups in Policy-Making on Financial Market Supervision

The paper investigates the logics that underpin the production and use of a specific type of knowledge, namely expert knowledge, in the field of European financial market supervision. The use of ad-hoc, independent “expert groups” has been a continuous feature of the European Commission’s policy making process since financial market supervision became a central focus at European level in the late 1990s. The most prominent examples include the Lamfalussy “Wise Men” report in 2001 on financial integration, the De Larosière High Level Group report in 2009 on reforming EU supervision, and the Liikanen High Level Expert Group report in 2012 on banking reform. With a specific focus on the De Larosière expert group, the analysis investigates how the European Commission made use of these ad-hoc expert groups for symbolic purposes in order to secure legitimacy in its organizational environment – notably member states and other European institutions – and/or to substantiate its policy preferences. According to Boswell (2009), organizations use expert knowledge for different purposes in the decision-making process. Knowledge can be instrumental, i.e. serve the purpose of finding the best possible policy solution. But it can also have symbolic functions linked to the need to be seen to be drawing on external expertise (legitimacy concerns), or to substantiate the preferred policy solution. The analysis combines content and discourse analysis of official documents and press articles, and draws on over twenty interviews with Commission staff members, members of the De Larosière High Level Expert Group, and Brussels based experts on financial market supervision. The paper first presents the context in which the Commission called upon Jacques de Larosière to chair an expert group on financial supervision in the EU before outlining the theoretical standpoints, analytical framework and methods. The analysis is divided into three parts: the first deals with the use of the De Larosière report for strategic purposes to build a narrative and a legitimate basis for creating three European Supervisory Authorities; secondly, it considers how the selection of the group members and block-boxing of the group discussions constitutes a rationalised myth; thirdly, it explores the implications of the dynamics within the expert group and the role of the chair in the promotion of the report recommendations.