Principals, Agents, and the Discipline of Planning: Evidence from the Failure of Credit Suisse

To what extent can transnational coordination among bureaucrats compensate for political barriers to international cooperation under crisis conditions? This article examines this question through an inductive analysis of the failure and rescue of Credit Suisse in March 2023. I argue that through the routine exercise of contingency planning, social practices which foster discipline, trust, and mutual understanding may be developed among transnational technocratic networks, who are the agents of global governance. Such practices, in turn, embed cooperation among their political principals in the absence of binding agreement. Through cross-border contingency planning exercises within firm-specific Crisis Management Groups, transnational regulators successfully maintained cooperation in the months, weeks, days, and hours leading up to the Credit Suisse merger agreement, which both facilitated the decision that was made and allowed for workable alternative contingencies. Compared to prior cross-border bank failures, this is a tremendous leap forward in the breadth and scope of the global governance of international finance. The results suggest a renewed focus on the intangible elements of post-2008 reform alongside changes in formal rules. More broadly, the success of bureaucratic cooperation in this area points to a potentially enduring aspect of an otherwise retreating postwar multilateral order.