The case for a roadmap towards financial regulatory convergence

Daniel Broby (Department of Accounting and Finance, Stathclyde University, Glasgow, UK)

Journal of Financial Regulation and Compliance

ISSN: 1358-1988

Publication date: 11 November 2013



The trend towards substituted compliance has accelerated post the 2008 credit crisis and is now being pursued with an enthusiasm that is sidelining the prior trend towards multilateral rule convergence. This paper addressed the question of what to do about other regulatory regimes, such as those in Asia, Africa, and Latin America. The author argues that thought leaders, particularly the G20 and IOSCO, should ask whether financial supervisory convergence should be extended beyond its current UK-EU-US axis. The paper aims to discuss these issues.


Open policy review and discussion.


In conclusion, the current system of financial supervisory convergence has evolved by default. A process of substituted compliance has become the de facto modus operandi between the UK, Europe and the USA since the 2008 credit crisis. It has been widely accepted that competition in regulation is not as efficient as co-operation, provided the same similar risks are addressed by similar rules. The author believes that it makes sense to widen this current uncharted process of supervisory convergence to other international jurisdictions. The challenge, as illustrated, is how to do this. It requires a major gap analysis whereby a global regulatory body like IOSCO compares regulatory oversight and outcomes to expected standards as determined in Europe and the USA under the current status quo. Now that financial stability has been addressed by the regulatory bodies, it is argued that the time is now right to go one step further. That said, to make this happen in a disciplined, efficient and transparent way will require direction. It is pointed out that the G20 is this body that is best mandated to draw up such a roadmap towards financial supervisory convergence.

Research limitations/implications

Policy debate.

Practical implications

Regulatory reform.

Social implications

Market efficiency.


Thought piece that will provoke debate.



Broby, D. (2013), "The case for a roadmap towards financial regulatory convergence", Journal of Financial Regulation and Compliance, Vol. 21 No. 4, pp. 397-402.

Download as .RIS



Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.