Brexit and EU financial governance: business as usual or institutional change?

This article considers the implications of Brexit for EU financial governance. It first examines the implications for regulation. Drawing on the political economy of EU financial regulation and considering the UK’s generally facilitative and liberal approach, it predicts that a more interventionist period might follow Brexit. Major change in EU regulatory style is unlikely, however, not least given the influence of international financial governance on the EU. The article also considers the likely consequences for institutional governance and for the current uneasy arrangement, based on distinct euro area (Banking Union) and single market structures. It suggests that a strengthening of the European Supervisory Authorities is the most likely outcome and that functionally this involves the lowest risk. This strengthening is likely to be a function of a number of factors, including the greater prominence which the Authorities will have in relation to third country ‘equivalence’ assessments. The article also considers the conditions which may lead to a more radical re-organization of institutional governance and suggests that other environmental conditions, beyond Brexit, are likely to shape future developments.