The Political Economy of Financial Market Regulation
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The Political Economy of Financial Market Regulation

The Dynamics of Inclusion and Exclusion

Edited by Peter Mooslechner, Helene Schuberth and Beat Weber

This book focuses on recent financial market reforms, and their implications for social, economic and political exclusion. In particular it considers the hitherto under-researched question of whose interests govern the design of regulatory mechanisms and who influences the decision-making process. This process is set out as contested terrain, in which there are winners and losers, and in which there are inevitably circles of exclusion. The authors, comprising financial authority experts and academic specialists, expand the concept of exclusion beyond its typical social dimension to incorporate all actors, be they individuals or institutions not permitted to contribute to financial market regulation as a public good. As they point out, this may take the form of political, economic or indeed cultural exclusion. The book examines the conflicts that arise between various interests and how these are managed within the process of regulation.
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Chapter 9: The Governance of Occupational Pension Funds and its Politico-Economic Implications: The Case of Austria

Stefan W. Schmitz


9. The Governance of Occupational Pension Funds and its PoliticoEconomic Implications: The Case of Austria Stefan W. Schmitz* This paper analyzes the efficacy of the governance structure of occupational pension funds (Pensionskassen – PKs) in Austria. Based on the results of the analysis, it further investigates the politico-economic implications for the political and legislative process regarding recent changes to the relevant act (Pensionskassengesetz – PKG). The first section explains the exclusion of the beneficiaries’ interests from the institutional interest of the PKs’ association, i.e. the distribution of power, by the underlying governance structure of PKs. It focuses on the structural conflict of interest faced by PKs, namely between their beneficiaries and their shareholders (almost exclusively large Austrian banks and insurance companies). The shareholders’ instruments to control the PKs are largely determined by the Joint Stock Company Act.1 The PKG includes provisions which can be interpreted as means to counterbalance the shareholders’ dominance and to ensure that PKs conduct their business in the interests of beneficiaries, but which were also motivated by the objective of selling PKs to beneficiaries and works councils. This section addresses the following question: How effective is the governance structure of PKs at the micro and meso level with respect to the objective of counterbalancing the structural dominance of shareholders? The notion of governance developed in the New * The author thanks Daniel Gradenegger for his excellent research assistance and the members of the working group on financial governance for their very helpful comments. The usual disclaimer applies. The views...

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