Why international standards are not set? Explaining ‘negative cases’ in post-crisis financial regulation

The past decade has spawned a vast literature examining the development of new international standards in finance since the crisis. But far less is known about how or why international standards do not exist in some areas. We review existing explanations of these ‘negative cases’ – based on functional necessity, path dependency, transgovernmental networks, financial industry power, and the influence of major jurisdictions – and argue that they cannot fully explain the diversity of examples. To address this, we develop a fourfold typology of negative cases, each of which we examine in detail: 1) Missing rules in which new domestic regulations did not develop into international rules (e.g. bank structural reform); 2) Failed agreements in which international rules are proposed but agreement is not reached (e.g. rules on globally systemically-important financial institutions or G-SIFIs); 3) Rivalrous standards in which multiple rules exist and/or that compete with domestic rules (e.g. international financial reporting and accounting standards); and 4) ‘Sham’ standards whereby minimal rules are agreed which have little impact (e.g. money market funds). We argue that our typology provides important new explanatory leverage in understanding the remaining gaps in post-crisis global financial rules.