Cooperative or Competitive? Private Regulators and Public Supervisors in the Post-Crisis European Financial Services Landscape

This article explores the interplay between private regulators and public supervisors within principles-based regulation and meta-regulation in the post-crisis European retail financial services landscape. It shows that the way in which the compliance with such regulatory frameworks is supervised and enforced may determine the type of relationship between private regulators and public supervisors – cooperative or competitive – that prevails at a specific moment in time. While there is evidence of both cooperation and competition between the two in the post-crisis era, a predominantly competitive relationship between private regulators and public watchdogs may severely undermine the practical importance of co-governance arrangements. A significant degree of cooperation between private regulators and public supervisors is key to ensuring their effectiveness. Public supervision and enforcement must therefore be responsive to the peculiarities of co-governance arrangements