Document Type


Publication Date

Summer 2016

Publication Citation

23 Indiana Journal of Global Legal Studies 455 (2016)


The disastrous performance of European financial-market regulation during the 2008 financial crisis convinced the European powers-that- be of the urgent need for further integration. Since then the European Union (EU) has established three European Supervisory Authorities (ESAs), which are commissioned to enhance capacity and harmonization of the European banking, insurance, and capital markets law. In carrying out this task, the ESAs employ so called ESA Guidelines, which have caught the attention of practitioners and scholars alike. As soft law, they bear a strong resemblance to instruments used on the global level to regulate the financial markets and therefore might fall prey to the same deficiencies. The ostensible resemblance, however, proves misleading. This Article argues that the deep legal embedding of the ESA Guidelines provides them with a different regulatory profile that leads to a strong enforcement effect (Part II.A), the danger of preponderant industry influence (Part II.B), and the specific characteristics of non-binding rules (Part III). Under the lens of regulatory subjectivity, these features may lead to inefficiency and reduced accountability (Part IV). To mitigate this negative impact, the Article proposes three modest reforms to the legal structure of the ESAs (Part V).