Scope of chapter

This chapter is concerned with the making of EU regulation for the single securities market. Since our understanding of the ways in which laws may foster the development of strong securities markets is still in its infancy, it is not possible to claim that the bureaucrats and politicians involved in the regulatory process are on a sure path that has been legitimised by scientific proof as being exactly what needs to be done by way of refinements to the legal system in order to promote the development of a securities market. The lack of definitive guidance on how law matters to the development of securities markets suggests that there could be dangerous uncertainty in the regulatory process, involving strong risks of counterproductive policy decisions about the necessary rules, potential for exploitation by agenda-controlling bureaucrats intent on empire-building or by powerful interest groups that have influence over them, and vulnerability to political distortions. The quality of the regulatory process influences how much weight we should attach to these concerns. If there are effective safeguards built into the process that minimise the chances of policy mistakes and curb opportunities for bureaucratic excess or political or private distortions, the fact that we do not have a clear starting point, in the form of a comprehensive blueprint of all the laws that are conducive to securities market growth, becomes a much less troubling concern than it might be otherwise.

Formulating policy in the EU is a complex and multi-faceted undertaking.