The optimal enforcement mix in the financial sector – A law and economics perspective

This chapter provides a law and economics analysis of the three main modes of enforcement of EU law in the financial sector, that is, private, administrative, and criminal enforcement. It explores which of them may be best-suited for a particular domain of financial regulation, focussing on consumer and investor protection. The authors show that the enforcement-related choices made by the EU legislator across different domains so far lack coherence and cannot be entirely explained on the basis of an economic rationale. They also suggest how law and economics could inform the development of a more coherent enforcement architecture for the financial sector.