GoJIL GoJIL Vol. 2, No. 1 (2010)
Yes, We Can (Control Them)! – Regulatory Agencies: Trustees or Agents?
This article raises the question over whether there have been changes in the mode of delegation between national executives and national regulatory agencies in the financial sector caused by the financial market crisis. Illustrated by the case of Germany, the two following ideal types of delegation are elaborated and applied to the case of the German supervisory authority BaFin: principal-agent theory and trust theory. For the periods before and after the crisis, political influence on the agency is examined and – with its intentions and results – assigned to one of the two ideal types. With this approach the financial market crises cannot be identified as the trigger for changes in the mode of delegation but merely as a kind of catalyst.
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