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Macroprudential Policy on an Uneven Playing Field: Supranational Regulation and Domestic Politics in the EU's Dependent Market Economies
Author(s) -
Piroska Dóra,
Gorelkina Yuliya,
Johnson Juliet
Publication year - 2021
Publication title -
jcms: journal of common market studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.54
H-Index - 90
eISSN - 1468-5965
pISSN - 0021-9886
DOI - 10.1111/jcms.13097
Subject(s) - european union , financial crisis , globalization , politics , financial market , financial regulation , economic system , economy , international economics , economics , economic policy , business , political science , financial system , market economy , finance , macroeconomics , law
Central bankers and financial regulators in East Central Europe and the Balkans regularly employed macroprudential policy before the global financial crisis and continue to be among its most active proponents in the European Union. We draw upon the Dependent Market Economy framework to explore how the EU's five DMEs – the Czech Republic, Hungary, Poland, Romania, and Slovakia – have used macroprudential policy to manage the uneven distributional effects of financial globalization and European integration. We contend that while structural and EU‐specific institutional factors define the available policy space, policy choices within that space depend upon how domestic actors translate macroprudential policies into their local contexts. Overall, our analysis highlights the social impact and challenges to European integration of heavy DME reliance on macroprudential policy making, especially when motivated by domestic financial nationalism.