With Friends like These: Explaining Advocacy Coalitions over Financial Regulatory Policy

Within the scholarship on the politics of financial regulation, the financial industry groups is often regarded as a key factor in shaping the design of regulatory policies. Financial industry lobbying, however, rarely occurs in isolation. As the regulatory response to the financial crisis has demonstrated, the political conflict surrounding the design of financial regulatory policies has often been characterized by broad and heterogeneous coalitions of financial and non-financial actors on both sides of different proposals. In this paper we investigate the origins of coalitions that have emerged over financial reforms by exploring the link with social networks linking different financial firms and the rest of the business community. In particular, we investigate whether the social relationships that different financial firms hold with other financial and non-financial industry firms, in the form of crossover ties between financial elites on the senior management of NFCs influence their capacity to generate coalitions in support its positions. We test this hypotheses by analyzing a new dataset of lobbying coalitions in the context of the regulatory response to the global financial crisis in the US and Europe.