In the last 30 years there has been a huge movement towards the internationalisation of financial regulation. This manifests itself at the EU level but also more widely.

We have the Basel Accord, the EU’s Solvency II, International Accounting Standards (the IAS), the International Organisation of Securities Commissions (IOSC), the European Securities and Markets Authority (ESMA), all the EU financial markets directives (for example MiFID), the International Association of Insurance Supervisors (IAIS). Some are just vehicles for co-operation but in all cases, the trend goes in one direction only – more international harmonisation of regulation and more regulation.

There are many reasons given for this trend. One is that it is supposed to prevent regulatory arbitrage. This means it is supposed to prevent financial institutions trying to do business from less-well-regulated jurisdictions, though the reality is that it may just make more complex the methods by which regulation is avoided.