The Fragility of Independent Financial Supervision Christopher P. Buttigieg & Ivan Carl Saliba

The regulation of financial systems in the United States and the European Union is heading in sharply different directions and the consequences may be felt far beyond either jurisdiction.

Writing for Constitutional Discourse, Chief Officer Supervision at the Malta Financial Services Authority (MFSA) Christopher P. Buttigieg and Technical Advisor Ivan Carl Saliba, argue that while the US and EU once shared a commitment to keeping financial supervisors at arm's length from political influence, their paths have now fundamentally diverged.

The EU has embedded supervisory independence into constitutional and quasi-constitutional frameworks, including treaty-level protections for the European Central Bank (ECB) and the 2023 joint European Supervisory Authorities (ESA) criteria, creating a system designed to insulate regulators from electoral pressures and industry capture. The US, by contrast, has seen its regulatory agencies become battlegrounds for political contestation, with executive orders and partisan pressure threatening the autonomy of bodies like the Federal Reserve and the Consumer Financial Protection Bureau (CFPB).

The authors situate this divergence within a broader global context. Supervisory independence is not merely a domestic preference but a pillar of international financial architecture, embedded in standards set by the Basel Committee, International Organisation of Securities Commissions (IOSCO), and the International Monetary Fund (IMF). When the US - historically the architect of many of those norms - begins dismantling its own regulators' independence, it risks providing a convenient precedent for jurisdictions where such independence is already precarious.

Read the full article here.