Paradigm Shift or Groundhog Day? (PDF)

Master's Thesis from the year 2013 in the subject Politics - International Politics - Region: Western Europe, grade: 2,0, University of Twente (School of Management and Governance), language: English, abstract: The United Kingdom has been at the epicentre of the global financial crisis erupting in 2007. The City of London's global interconnectedness as well as the long-established culture of regulatory self-independence triggered a near meltdown in the British banking system. Next to the immediate consequences for the British economy as a whole, the financial crisis led to a fundamental change of direction in national economic policies and destabilized a system of politics that had governed financial regulation in the UK for over two decades. The Thatcher administration had replaced the decaying manufacturing industry with a finance-led service sector and hence made the City of London the centrepiece of a self-ruling world based on the principles of privatisation and deregulation. The banking crash in September 2007, however, destroyed the illusion that an economic system which relied on light-touch financial regulation to promote the international competitiveness of the City was competent at the job of securing financial stability. The scale and prolonged effects of the financial crisis provided the central backdrop to the general election in May 2010.
The financial crisis spurred ad-hoc policy responses around the globe and energized efforts to strengthen financial regulation. Instead of focusing solely on the change of policy in financial supervision, the thesis analyses the developments in the public debate on post-crisis banking regulation that has accompanied the general election in 2010.The public opinion is the determinant factor for the ability to win elections - hence politicians must be concerned with the mobilisation of support support for their respective electoral programs. The near collapse of the global banking system destroyed the public confidence in governmental capacities to cope with the effects of the financial crisis. The challenge governments are facing today is not only to find more effective economic policies but to articulate moral visions capable of restoring their legitimacy in difficult times. In the UK, the search for a new legitimizing narrative to restore public confidence in the state as well as market power characterised the electoral campaign of all three major parties. The thesis investigates how the change of government in May 2010 has been perceived by the public and whether a potential replacement of the pre-crisis economic paradigm in favour of a new leitmotif in banking regulation has been the subject of public debate.