Restraining regulatory capture : an empirical examination of the power of weak interests in financial reforms.

Summary The purpose of the study is to question the capture of regulation by concentrated financial interests in the debates over what to do after the credit crisis that originated in the United States in 2008. Policymakers in the United States and the European Union have undertaken ambitious reform efforts to better protect consumers of financial services. Debates in the U.S. Congress and the European Parliament concluded with important decisions on credit regulation. The debates were highly politicized and involved intense lobbying by financial and civil society interest groups, which would normally have been considered much weaker than their opponents. Paradoxically, a civil society coalition of modest means succeeded in convincing decision-makers of the need for change and in thwarting the efforts of the financial lobby to prevent it. Why did weak and peripheral actors prevail over rich and powerful ones?