A Conceptual-Empirical Study of the Role of Regulation in Promoting a Single Euro Payments Area
B Theoretical framework 27
27 B Theoretical framework This chapter provides an overview of the theoretical fundamentals required to analyze systematically banking regulation and market integration. Three theoret- ical components will be presented in detail: New Institutional Economics (NIE), the functional dimension of regulation including the Public and Private Interest Theory, and the territorial dimension of regulation comprising the Europeaniza- tion Theory. The broad field of banking regulation can be considered a problem of insti- tutional arrangements in the banking sector (Krahnen, 1993, p. 804). The objec- tive is to conduct the behavior of banks, bank employees and customers in a way that an optimally functioning banking system can be created. In this respect, the behavior-shaping effect of institutional arrangements on individuals and firms is the subject of NIE. Theoretical instruments such as the Principal Agent Theory facilitate a systematic analysis of the operating principles of institutions by in- cluding the interaction of different actors and interest groups. Hence, NIE is an essential theory component for an analysis of banking regulation and a number of preliminary institutional-economic considerations will be outlined in this chapter. Regulation theory in general deals with governmental interventions in indi- vidual economic sectors and has advanced considerably over the last three dec- ades. Given the specific conditions in a European multilevel system, this book takes a differentiated view on banking regulation by distinguishing between a functional and a territorial dimension to analyze policy implications for the inte- gration of retail banking markets in Europe. The functional aspect means that governmental...
You are not authenticated to view the full text of this chapter or article.
This site requires a subscription or purchase to access the full text of books or journals.
Do you have any questions? Contact us.Or login to access all content.