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Banks are regulated because they do not engage in an ordinary economic activity, as their are likely to create systemic risk. In the real economy indeed, banks play the role of providing credit to entrepreneurs who operate on the markets for goods and services. These credits are mainly financed through deposits made by depositors and, to a lesser extent, by shareholders (i.e., capitalists). That is how liberalism and capitalism are bound up. However, banks also have the power to create money by the book entries they make when they grant loans ('book money'). As such, the banks share with the State this extraordinary power to exercise monetary authority, which some describe as sovereign power. It is possible that the digital eventually calls this power into question, since the Regulation currently hesitates to seize control over new instruments that are called "virtual currency" and that are used as proper "currency" or as an ordinary instrument for cooperative relation. Banks' prominent sovereign character justifies, first and foremost, that the State is granted the power to choose the institutions which benefit from the privilege of creating book money- in this regard, the banking industry has always been a monopoly. Hence, Banking Regulation is first an ex ante control to enter the profession, and also a careful monitor of the people and institutions that claim they are in. In addition, banks and credit institutions lend more money than their own funds can allow: the whole banking system is necessarily based on the trust that each creditors place within the bank, including depositaries who leave their funds at the banks' disposal for it to use them. That is where Bank Regulation intervenes to establish what is called 'prudential ratios', i.e., ratios that ensure the soundness of the institution by determining the amount of money that banks can lend based on the equity and quasi-equity they actually have. Moreover, banks are constantly monitored by their supervisory Regulator, the Central Bank (in France, the Banque de France) that ensures the safety of the whole system by setting the State as the lender of last resort. This can, however, incentivize a large financial institution to take excessive risks based on its reliance on the fact that the State will save it eventually- that is what the 'moral hazard' theory systematized. All monetary and financial systems are built on these central banks that are independent from governments, which are far too reliant on political strategies and which cannot generate the same trust that a Central Bank inspires. Since the missions of central banks have increased over the years, and since the notions of Regulation and Supervision have come together, we tend to consider that Central Banks are now fully fledged Regulators. Besides, Banking Regulation has become all the more central since banking is no longer primarily about loaning but rather about financial intermediation.  Banking Regulation and Financial Regulation are mixing. In Europe , European Central Bank is in the center.

The concept of 'Agency', sometimes confused with the one of 'Regulator', designates a way of deconcentrating the State. Away from a French Jacobin outlook, states have indeed gradually devolved their sovereign responsibilities to other institutions, which are often geographically distant from the state's political capital city. These agencies are a form of technical decentralization because they are in charge of operational tasks and specific expertise, e.g., as regards employment, environment or health issues. This model, which is very common in Scandinavian countries, is often associated with federal structures, like in the United States. It is still fairly remote to the French model that remains to this day built on the idea of a centralized and unified State. So far, France has only developed a few agencies (e.g., France Trésor, tasked with managing France's government debt and cash positions). In a different perspective, although the two notions are homonyms, the American financial theory developed the notion of 'agency' to describe the relationship between the corporate officer (the agent) and the shareholder (the principal), who empowers the first to act on his behalf to serve his interest. Information asymmetry and conflict of interest mark this relationship, which explains that this theory helped developing multiple safeguards, conveyed by the Financial Regulation.

Rating agencies are private companies that assess the risk of defaulting payment by debtors. As such, the rating of a borrower affects the value of the debt security it issued and that is to circulate in the markets. That is why the activity of credit rating agencies is critical to the security of financial instruments and the functioning of financial markets, but also to the whole global credit system. For instance, an AAA rating guarantees security to investors. Rating agencies helps building trust in financial markets and in the banking system. Henceforth, since everyone relies on them as they save people's time from seeking on their own information on securities or on those who issue them on the marks, international rating agencies have become crucial operators. 'Rating' has also become a business, which is now concentrated within the hands of three undertakings (two American and one French). It has often been said that these three are conflicted. Some have indeed brought up the fact as they have provided the markets with unreliable information (especially about subprime and securitization) prevented them to self-discipline, which eventually participated in the global spread of risks and defaults. The difficult history between the rating agencies, whether they are considered as mere businesses, crucial operators or as companies undertaking a public service, which eventually led to implement a specific Regulation in the immediate aftermath of the financial crisis, shows how the information is a public common. This justifies the intervention of the Financial Regulator, namely to better protect the consumer. Should we go further on? Some have mentioned the idea of ​​nationalizing the business and hand it over to Government institutions (or at least public ones). This is, however, no longer on the agenda, as many conflicts of interests may arise since rating agencies keep on rating the paradoxical debtors that States are.

Market regulation is defined as the set of mechanisms that allow markets to establish and maintain long-term balances that they cannot establish and maintain in the long term by their own forces. It is therefore a set of institutions and rules that relate to the markets and against which they are "black boxes". On the other hand, it may happen that certain companies, because they are "crucial operators", justify that a public authority looks in transparency and controls its structure and its functioning. It is then a supervisory function. It may happen that this supervisory function is exercised by the Regulatory Authority, when it ensures the solidity of a crucial operator, which the sector absolutely needs, for example because it manages a monopoly network. natural. It also happens that it is a separate Supervisory Authority, as is often the case in banking matters, supervision being provided by central bankers. Supervision then takes the form of prudential supervision, ensures the solidity of the operators, that is to say enters into the operators and thus controls the adequacy of equity and quasi-equity , the organization of the company (rule of "four eyes" for the, which assumes that they not only a Chairman but also a CEO), control of managers etc. Thus prudential standards are indifferent to the market context. Regulation is for the outside, prudential is for the inside.   This opposition has turned out to be catastrophic since precisely there is communication between the inside and the outside when it comes to financial markets, since the financial market is a market of and information is designed inside. companies issuing the securities. Therefore, there can only be effective regulation if there is a well-designed prudential framework, and the opposition itself does not make sense, which is why many countries first identified the internal organs. to companies as soon as they emit information, thus feeding the markets and influencing the behavior of investors and other operators, as falling under regulation. This was the case with banks or investment service providers which are fully subject to financial regulation. The 2008 law gave full awareness of this continuum between prudential and regulatory and justified the creation of the Autorité de Control Prudentiel, which later became the Autorité de Control Prudential et de Résolution (ACPR), the integrity of the markets implying that the control of the reliability of the internal organization of certain operators with regard to their organization, the confidence that one can have in them and their way of exercising power, being the pledge of the solidity of the market itself. This is why the new reflections on financial regulation, then on Regulation in general, highlight the notion of “”, which we could also call “crucial operators”, and which sets apart operators whose weight is so important. important on the market (regulatory criterion) that their internal organization must be special or particularly supervised (prudential criterion). Thus, regulation and governance, which were opposed, have become inseparable. This is aimed at all operators that a sector cannot do without. They become transparent to the public authority which supervises them.

This article provides a basis for an article published  in the Recueil Dalloz  in French : "Le droit de la compliance". ‘Compliance’ issues have been increasingly discussed in recent years. Articles, handbooks, soft law, decisions or definition have been written. But nothing really converges. The term ‘conformity’ [conformité in French] is used in parallel, or even instead of the usual concept of compliance. There are as many definitions of what compliance is as there are authors writing on the matter. And yet it is used in manifold ways, from Competition law to International Finance law, from the hardest law (enforced with the help of the most stringent sanctions) to business ethics, according to which behaving should be enough to be compliant. At a time when compliance invades law, it should be first noted that we are too shortsighted to grasp the mechanism (I), whereas it is necessary to build a comprehensive Compliance law (II). Read developments below.