Who influences global banking standards? A quantitative analysis of Basel III

This paper uses consultation replies to the BCBS’s Basel III main consultative paper to map and compare preferences of different stakeholder categories. In addition, the paper investigates whether the degree to which stakeholder’s preferences were met in the final proposal depend on their geographical or (sub)sectoral origin. It disentangles the effects from geographical and sectoral backgrounds, allowing it to paint a more disaggregated picture on differences between stakeholders than commonly found in the IPE literature on financial regulation, where such differences are typically assumed in the IPE literature but rarely tested. The empirical tests of the extent to which preferences of various stakeholder groups differ cast doubt on some “established truths” and common assumptions in the IPE literature on financial regulation and global banking standards. One such assumption is that private and financial sector stakeholders largely harbour homogeneous preferences. Also, by breaking down the regulatory outcome of the Basel III process, and relating it to stakeholder preferences, the paper suggests that sectoral rather than geographical dimensions are more important to understand stakeholders’ probabilities to having their preferences met through regulatory processes. The results also challenge the notion that the previous dominance of a limited number of powerful advanced economies has been eroding since the global financial crisis.