Ensuring Consistent Decision-making when Administration is Decentralized: A Case Study of Scandinavian Countercyclical Capital Buffer Rates

Two major developments in post-crisis EU banking regulation are in tension with each other: While the EU now seeks to have common regulatory standards across all Member States, important pieces of new EU legislation leaves for national administrative authorities to conduct the calibration of regulatory requirements through decision-making.Such a set-up could result in inconsistent decision-making, thus creating differences in standards between Member States.Against this background, this article identifies two means for mitigating this tension: EU legislation could either state the risk preferences of the legislator or provide instructions on what decision national authorities should adopt given certain circumstances.The article then considers the extent to which the EU law framework for national decisions on countercyclical capital buffer rates employs these means and what policies the Danish, Norwegian and Swedish authorities have developed where EU law sources are vague or silent.