The revival of the nation-state? Stock exchange regulation in an era of globalized financial markets

The debate on economic globalization suggests that the blurring of territorial boundaries shifts the power relations between nation-states and domestic market constituencies in favour of the latter. States have lost autonomy since policies are increasingly formulated in supranational or global arenas. Market actors seem to profit from economic and political deterritorialization. They may use their wider choice of geographic location in order to lobby for low regulated market environments. The article seeks to differentiate this common view considerably. It argues that economic internationalization tends to erode the legitimacy of self-binding agreements that had formerly solved regulatory problems. Networks of interstate collaboration in turn lack the ability to monitor and enforce negotiated agreements. Both developments impose new duties of market supervision on the nation-state. Empirical reference is drawn from the German stock exchange sector that underwent a process of fundamental transformation leading to an enhanced role of the nation-state in the model of sectoral governance.