Transnational peer review for regulating financial stability

Abstract

The article examines the role of transnational peer review in shaping financial market regulation in Australia in pursuit of financial stability. Transnational regulatory networks have become an important source of standards and enforcement practices in financial regulation. In the aftermath of the financial crises of the 2000s, global initiatives to strengthen financial supervision have reinforced peer review mechanisms to monitor the national implementation of transnational standards. Through such peer review, regulatory networks can influence domestic rules and practices, as well as the exercise of discretion by national regulatory authorities. The article studies the interaction between transnational peer review and regulatory choices in Australian financial supervision through three case studies. Notwithstanding concerns in the literature about the efficacy and legitimacy of regulatory networks, the case studies demonstrate the scope for productive dialogue between the transnational and national level in making regulatory choices.