Abstract

The financial crisis of 2008 raised the politics of regulation to a new level of practical and scholarly attention. We find that recent reforms in U.S. financial markets hinge on intellectual resources and new organizational actors that are missing from existing concepts of regulatory capture or business power. In particular, small advocacy groups have proven significantly more successful in opposing the financial services industry than existing theories predict. By maintaining the salience of reform goals, elaborating new analytic frameworks, and deploying specialized expertise in post-enactment debates, smaller organizations have contributed to a diffuse but often decisive network of pro-reform actors. Through the rule-writing process for macroprudential supervision and derivatives trading, these small organizations coalesced with other groups to form a new stability alliance that has so far prevented industry groups from dominating financial regulation to the degree that occurred in earlier cases of regulatory reform.