The quiet politics of hybrid accountability mechanisms: watering down regulation through expertise?

This chapter investigates how the International Swaps and Derivatives Association (ISDA) made use of hybrid accountability channels and how it influenced the European regulation of over-the-counter (OTC) derivatives. It extends existing theories on the relationship between business and politics to the case of the European decision-making process on the European Market Infrastructure Regulation (EMIR). Consequently, the paper develops the expectation that ISDA had no chance of influencing decision-making when regulatory change was first put on the agenda, but instead it influenced the direction of policy when the technical contours of the new regulatory regime had to be defined. Based on a content analysis of policy documents, the chapter describes ISDA's successful advocacy for sheltering parts of the market from central clearing obligations, confirming that in times of high saliency business organisations will not interfere with public authorities' regulatory efforts, but will hit back as soon as issues become more technical.