Compliance and Regulation Law bilingual Dictionnary

Banks are regulated because they do not engage in an ordinary economic activity, as their are likely to create systemic risk. In the real economy indeed, banks play the role of providing credit to entrepreneurs who operate on the markets for goods and services. These credits are mainly financed through deposits made by depositors and, to a lesser extent, by shareholders (i.e., capitalists). That is how liberalism and capitalism are bound up. However, banks also have the power to create money by the book entries they make when they grant loans ('book money'). As such, the banks share with the State this extraordinary power to exercise monetary authority, which some describe as sovereign power. It is possible that the digital eventually calls this power into question, since the Regulation currently hesitates to seize control over new instruments that are called "virtual currency" and that are used as proper "currency" or as an ordinary instrument for cooperative relation.

Banks' prominent sovereign character justifies, first and foremost, that the State is granted the power to choose the institutions which benefit from the privilege of creating book money- in this regard, the banking industry has always been a monopoly. Hence, Banking Regulation is first an ex ante control to enter the profession, and also a careful monitor of the people and institutions that claim they are in.

In addition, banks and credit institutions lend more money than their own funds can allow: the whole banking system is necessarily based on the trust that each creditors place within the bank, including depositaries who leave their funds at the banks' disposal for it to use them. That is where Bank Regulation intervenes to establish what is called 'prudential ratios', i.e., ratios that ensure the soundness of the institution by determining the amount of money that banks can lend based on the equity and quasi-equity they actually have.

Moreover, banks are constantly monitored by their supervisory Regulator, the Central Bank (in France, the Banque de France) that ensures the safety of the whole system by setting the State as the lender of last resort. This can, however, incentivize a large financial institution to take excessive risks based on its reliance on the fact that the State will save it eventually- that is what the 'moral hazard' theory systematized. All monetary and financial systems are built on these central banks that are independent from governments, which are far too reliant on political strategies and which cannot generate the same trust that a Central Bank inspires. Since the missions of central banks have increased over the years, and since the notions of Regulation and Supervision have come together, we tend to consider that Central Banks are now fully fledged Regulators.

Besides, Banking Regulation has become all the more central since banking is no longer primarily about loaning but rather about financial intermediation.  Banking Regulation and Financial Regulation are mixing. In Europe , European Central Bank is in the center.


La presse britannique, par exemple The Guardian, se fait l'écho de la position britannique offensive en matière de régulation financière.

La régulation épousant les contours de son objet, la régulation financière et bancaire est nécessairement en grande partie mondiale. En outre, la régulation est certes une question pratique mais aussi le résultat d'une théorie. Or, les britannique sont souvent précurseurs en la matière.

Ils ont d'autant plus les moyens de faire passer leurs idées que ce sont des britanniques qui occupent les postes-clés dans la régulation mondiale. Ainsi, c'est Monsieur Mark Carney, Gouverneur de la Banque d'Angleterre, qui préside en outre le Conseil de la Stabilité Financière, organisme mondial qui élabore des normes visant à éviter les crises systémiques.

Ainsi, les décisions mondiales sont prises par les Etats, à l'occasion des G20. Une réunion du G20 va se tenir à la fin du mois de novembre en Australie, en présence de tous les institutions financières internationales.

Mais la doctrine britannique se diffuse depuis longtemps. Comme souvent, elle est claire, nette et pédagogique : les Etats ne doivent plus toujours payer, alors même que les banques doivent être secourues. La solution est alors que les créanciers privés qui apportent des fonds à une banque systémique en péril doivent recevoir en échange des titres et non plus demeurer dans la situation confortable du créancier qui attend que la banque, souvent refinancée par ailleurs par l'Etat, soit revenue à meilleure fortune.

Cela montre en premier lieu que la faillite des banques redevient plus "ordinaire", la règle de l'Etat débiteur en dernier ressort s'éloignant, du fait de l'aléa moral qu'elle contient par nature et de l'épuisement financier des Etats.  Cela illuste en second lieu que la régulation bancaire devient de plus en plus un droit des procédures collectives, plus ou moins spécifiques.

June 23, 2019


The European Banking Union is based on supervision as much as on regulation: it concerns the operators as much as the structures of the sector, because the operators "hold" the sector.

This is why the "regulator - supervisor" holds the operators by the supervision and is close to them.

He meets them officially and in "soft law" relations. This is all the more necessary since the distinction between the Ex Ante and the Ex Post must be nuanced, in that its application is too rigid, in that it involves a long time (first of all the rules, then to apply them, then to notice a gap between rules and behaviors, then to repair it) is not appropriate if the system aims at the prevention of systemic crises, whose source is inside the operators.

This is why the body in charge of solving the difficulties of the systemic banks for the salvation of the systeme meets the banking sector itself, to ensure that they are permanently "resolvable", so that the hypothesis of their resolution never arises. This is the challenge of this system: that it is always ready, for never be applying.


In the European Banking Union, the Single Resolution Board (SRB) is in charge of "resolve" the difficulties of European systemic banks in difficulty. It is the public body of the second pillar of the Banking Union. The first pillar is the prevention of these difficulties and the third is the guarantee of deposits. The resolution is therefore more like an Ex Post mechanism.

But in this continuum through these three pillars between the Ex Ante and the Ex Post, the SRB does not wait passively - as would a traditional judge do - that the file of the troubled bank reaches it. Like a supervisor - which brings it closer to the first public in the system (Single Supervisory Board -SSB), which supervises all the banks, it is in direct contact with all the banks, and it approaches the hypothesis of a bank in trouble by a systemic perspective: it is therefore to the entire banking system that the SRB addresses itself.

As such, it organizes meetings, where he is located: in Brussels.

Thus, on June 18, 2019, all banks came to discuss with the Single Resolution Board to know what it wants from the banks and for the banks, in what is called a "dialogue meeting".

To resolve in Ex Post the difficulties of a bank, it has to present a quality (a little known concept in Bankruptcy Law): "resolvability". How build it? Who build it ? In its very design and in its application, bank by bank.

For the resolution body vis-à-vis all players in the banking and financial sector, it's clear: "Working together" is crucial in building resolvability ".

In the projection that is made, it is affirmed that there can be a successful resolution only if the operator in difficulty is not deprived of access to what makes to stay it alive, that is to say the banking and financial system itself, and more specifically the "Financial Market Infrastructures", for example payment services.

Does the Single Resolution Board expect spontaneous commitments from the FMIs for such a "right of access"? In this case, as the Single Resolution Board says, this right of access corresponds to "critical functions" for a bank, the resolution situation can not justify the closure of the service.

By nature, these crucial operators are entities that report to regulators who oversee them. Who enforces - and immediately - this right of access? When one can think that it is everyone, it risks being nobody .... That is why the resolution body, relaying in this a concern of the Financial Stability Board, underlines that it is necessary to articulate the supervisors, regulators and "resolvers" between them.


To read this program, since it is a proposed program of work for the banking sector, four observations can be made:

1. We are moving more and more towards a general "intermaillage" (which will perhaps replace the absence of a global State, but it is an similar nature because it is always to public authorities that it refers and not to self-regulation);

2. But as there is no political authority to keep these guardians, the entities that articulate all these various public structures, with different functions, located in different countries, acting according to different temporalities, these are the companies themselves that internalize the concern that animates those who built the system: here the prevention of systemic risk. This is the definition of Compliance, which brings back to companies, here more clearly those those which manage the Market Infrastructures, the obligations of Compliance (here the management of systemic risk through the obligation of giving access).

3. Even without a  single systemic guard, there is always a recourse. That will be the judge. There are already many, there will probably be more in a system of this type, more and more complex, the articulation of disputes is sometimes called "dialogue". And it is undoubtedly "decisions of principle" that will set the principles common to all of these particular organisms.

4. We then see the emergence of Ex Ante mechanisms for the solidity of the systems, and the solidity of the players in the systems, and then the Ex Post resolution of the difficulties of the actors according to access to the solidity of the infrastructures of these systems, which ultimately depend on judges (throughout the West) facing areas where all of this depends much less on the judge: the rest of the world.



Dec. 11, 2014

Documentary Base : Doctrine

Référence complète : Roussel Galle, Ph. et Douaoui-Chamseddine, M., Les défaillances bancaires et financières : un droit spécial ?, Revue de droit bancaire et financier, déc. 2014, p.64-65.

Les étudiants de Sciences po peuvent lire l'article par le drive dans le dossier "MAFR - Régulation"

March 2, 2011

Documentary Base : Doctrine

Paru en 2011, ce numéro thématique porte sur "La supervision" au regard du risque systémique, tandis que le précédent portait sur "La régulation" au regard de ce même thème.

Il en ressort, pour éviter la prochaine crise, la volonté d'étendre la supervision, notamment aux "non-banques", comme les compagnies d'assurance, et de la renforcer, notamment quant aux moyens de contrôle, de surveillance et de sanction des Autorités de supervision.

Nov. 29, 2010


Référence complète : FRISON-ROCHE, Marie-Anne, La nature hybride du Conseil de régulation financière et du risque systémique, D.2010, chron., p.2712-2714.

Le Conseil de la régulation financière et du risque systémique établi par la loi du 22 octobre 2010 montre que la summa divisio entre régulation et prudentiel n’existe plus, puisque les opérateurs financiers sont systémiques. La composition du Conseil le cristallise en rassemblant le gouverneur de la Banque de France, le président de l’AMF et le président de l’Autorité des normes comptables. En outre, le Conseil revient sur la distinction naguère affirmée entre régulation et politique, puisque ces présidents d’Autorités indépendantes sont présidés par le Ministre de l’Économie. Cela tient au fait que la sortie de la crise suppose le recours à la décision purement politique. Si ces deux liens, avec le prudentiel, avec le politique, avaient été reconnus, la crise ne serait peut-être pas advenue.

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March 11, 2005


Référence complète : FRISON-ROCHE, Marie-Anne, "L’hypothèse de l’interrégulation", in Les risques de régulation, coll. « Droit et Économie de la Régulation », t.3, Dalloz / Presses de Sciences-Po, 2005, p.69-80.

Cet article a pour objet de proposer une nouvelle notion : "l’interrégulation". Il s’agit de mettre en place un mécanisme qui permet d’aboutir à une décision unifiée alors que plusieurs régulations autonomes, voire contradictoires, sont légitimes à prétendre la régir. Cela répond donc à une lacune du système général, dont l’antinomie est une variante. Le pouvoir politique n’a plus les moyens d’unifier ces sources disparates parce qu’il est "dépassé par le mondialisation des secteurs et des marchés. De la même façon, le mode hiérarchique du droit traditionnel ne peut convenir à des régulations autonomes. Il faut donc une interrégulation entre les régulateurs, sur le mode d’une doctrine commune, ou par des moyens procéduraux, comme cela de "l’avis autorisé".

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Oct. 20, 2003

Organization of scientific events

Référence complète : FRISON-ROCHE, Marie-Anne (dir.), Régulation, risque et crise, Forum de la Régulation, 20 octobre 2003.

May 11, 2000


Référence complète : FRISON-ROCHE, Marie-Anne, "Synthèse" in Le droit et la sécurité, Aix-en-Provence, 11 et 12 mai 2000, Marseille.