Please join us for a colloquium being given by Kim Pernell-Gallagher from Harvard University.
"How the U.S. Got it Wrong: The Regulation of Securitization in the U.S., Canada, and Spain"
I ask why banking regulators from different countries developed different regulatory regimes in the years leading up to the recent global financial crisis, despite subscribing to the same transnational regulatory agreement (the 1988 Basel Capital Accord). This presentation focuses on the divergent regulation of one particularly salient bank activity, asset securitization, in the U.S., Canada, and Spain. Drawing from archival material and in-depth interviews with banking regulators, I argue that American, Canadian, and Spanish regulators made different choices because they subscribed to fundamentally different conceptions of economic order, which can be traced back many decades. By highlighting how sociological institutions structure policymaking, even in the modern globalized and transnational era, I contribute to a literature that has done much to explain how financial incentives and power dynamics shape the outcomes of regulation, but has largely overlooked the implications of what regulators believe to be true. I discuss implications for both theory and policy.