Supranational Financial Supervision: A Pipe Dream, or an Idea whose Time has Come?

I contributed a chapter to an e-book just published by the Florence School of Banking and Finance and edited by Franklin Allen, Elena Carletti, Mitu Gulati and Jeromin Zettelmeyer. I raise the question whether concerns about financial fragmentation may force a debate about new forms of supranational supervisions of certain globally critical financial firms - probably not banks, but possibly infrastructures and information intermediaries.

Such supranational financial supervision has been operational in the EU, including the UK, for a number of years with ESMA's supervision of credit rating agencies and trade repositories, even as such supranational supervision was widely viewed as Utopian as recently as the mid-2000s. I recommend institutional experimentation at the global level and/or in other regional contexts, in anticipation of the possibility that a future crisis may generate starker trade-offs between cross-border financial integration and national supervisory autonomy.