The Operation of Supervisory Colleges in EU Banking Supervision: A Case Study of Soft Law Becoming Hard Law

Abstract

In this paper, I consider the case of supervisory cooperation among bank regulators where voluntary cooperation (soft law) over a period of 50 years has become hard law (regulations and directives) within the European Union. Driven by major international bank failures or financial crises, international standards for prudential supervisory cooperation among bank regulators have steadily developed and become more precise and defined since the early 1970s.

Keywords: international banking, supervisory cooperation, European Union, Basel Committee, Single Supervisory Mechanism, European Central Bank

JEL Classification: F30, N20, N24, G01, G18