ABSTRACT
Europe focuses more on the reconstruction of banking than on earlier visions such as peace through market integration and democracy through political example. After the crisis, institution building is quite another thing than it was pre-crisis. Notably, the creation of the European Stability Mechanism (ESM) has something of the political appearance of being a reversal of the historical project of European integration. Large and cross-border firms, regardless of their national origins, tend to share the interest of the European Commission in regulatory convergence, whilst smaller players, with local or national footprints, may be vulnerable in a single market. The information asymmetries between large firms and regulators are difficult to address. Legislative proposals were adopted under the 'co-decision' procedure by the Council and the European Parliament. The European Commission made a series of legislative proposals on financial regulation, based on the de Larosiere report and on suggestions made by regulatory committees and by the market.
