Abstract: Since the global financial crisis, European governments have sought to intensify the supervision of financial markets. Yet few studies have empirically examined whether regulatory approaches have systematically shifted in the aftermath of the crisis, and how these reforms have been mediated by long standing national strategies to promote domestic financial interests in the European single market. Examining hundreds of enforcement actions in three key European jurisdictions, this article provides one of the first comparative assessments of the pattern of longitudinal change since the crisis. In the UK, aggregate monetary penalties have increased 40-fold, and criminal sanctions have skyrocketed since 2009, while in France and Germany, the enforcement pattern has been more continuous, with both countries assessing penalties and prosecuting insider trading at similar rates before and after the crisis. The mixed pattern of change can be explained by domestic policymakers’ perception of the crisis. Where pre-crisis regulatory practices were seen as contributing to the financial meltdown, as in the UK, policymakers have overhauled domestic supervisory practices. But where domestic practices were not implicated, as in France and Germany, securities supervision has been less dramatically altered. While the regulatory path pursued in all three cases continues to reflect pre-existing strategies to promote national financial interests within the Single European Market, re-regulation on the European level may delimit regulators’ capacity to promote domestic financial interests in the future.
Europeans’ confidence in political institutions has dropped precipitously since the onset of the Euro-crisis in 2010. However, the decline in public trust in government varies tremendously across countries and occupational and educational groups. Analyzing more than 600,000 responses from 23 waves of the Eurobarometer conducted from 2004-2015, we find that economic factors explain much of the cross-national and over-time variation. The baseline level of trust is influenced greatly by a person’s position in the labor market: across European countries, citizens with more education and higher levels of skills, express more trust in government than those educational and occupational groups that have benefited less from European integration. The acute decline in the level of public trust in the past decade also has strong economic foundations. Residents of debtor countries that have seen unemployment rates skyrocket in recent years are now much less likely to trust national government than those in creditor countries that have fared better during the economic crisis, while the unemployed have lost faith in government to a greater degree than other parts of the population. Cultural, ideational, and political factors remain important for baseline levels of trust, but on their own they cannot explain the acute, asymmetrical decline in citizen trust observed over the last decade.