Financial Regulation Enforcement and the Criminal Law Dimension: an Irish perspective within the EU context

Criminal law and regulation constitute a binary divide. Regulation is ‘government in miniature’, control of policy objectives by central instrument. The Financial Regulation sub-domain is concerned with increasingly complex financial products and institutions and adaptive and innovative markets. The creation of an integrated, open, competitive, and economically efficient European financial market requires convergence of national sanctioning regimes. Ireland prompted by EU legislative demands established a hybrid central bank and financial regulator experiment. Its ‘light touch’ regulatory approach, coupled with a ‘retreatist’ enforcement style and ‘captured’ regulator, disastrously failed. Financial crisis reforms included populist calls for greater criminal law enforcement. Within the EU post de Larosiere Report, ongoing constitutionalization has been heralded, a new supranational constitutional layer and supervisory agencies were added, special resolution ‘stability’ intervention implemented, command and control techniques prevailed, and a new definition of regulation beyond rules where mechanisms and institutions are central emerged. The G20 structure advocated effective sanctioning regimes reforms, the EU Commission highlighted more criminal law involvement. But non-uniform EU member state regulatory norm convergence and greatly divergent sanctioning rules are both key obstacles to regulatory enforcement. Thus the EU itself engaged in a new process of enforcement and sanctioning standard setting and rule convergence. The hybrid multi-layered patchwork of European criminal law though evolving however is far from complete. Financial regulatory enforcement, based on ''effective, proportionate and dissuasive'' sanctions, is regarded by the EU Commission as one of four intrinsically linked priority principles grounding reforms. At the heart of the discourse this paper examines inter alia EU regulatory enforcement convergence, the role and efficacy of Irish and EU criminal jurisprudence and institutions, and the impact of financial markets where regulation tools, rules, mechanisms and institutions have globally converged around ‘risk’, amid increasing public choice policy-making, all interweaving in a dynamically adaptive complexity.