International Financial Law
- LAST REVIEWED: 25 June 2013
- LAST MODIFIED: 25 June 2013
- DOI: 10.1093/obo/9780199796953-0022
- LAST REVIEWED: 25 June 2013
- LAST MODIFIED: 25 June 2013
- DOI: 10.1093/obo/9780199796953-0022
Introduction
With growing financial globalization, international financial law has increased in significance and profile, especially in the wake of the global financial crisis of 2008 and the ongoing European financial crisis. Globalization of financial markets and the increase in frequency and severity of financial crises have led to evolving change in the realm of international financial law also. International financial law, historically primarily soft law in the form of standards transposed into domestic law, rules, and regulations, is most especially facing challenges in the wake of recent crises with calls and efforts to both reform its content and enhance its structure. This development, however, constitutes an ongoing debate and one that is particularly challenging because of issues relating to sovereignty, enforcement of decisions, fairness, and effectiveness. The debate overlaps with, and has significant potential implications for, both public international law and municipal law. Given its frequently nontraditional nature, international financial law can be compared and contrasted with monetary law and trade law, which are comparatively more traditional in their degree of legalization.
International Law and Municipal Law
The difficult question of how much legal power a state commands and who commands the allocation of jurisdictions of sovereignty, the legal dispute settlement processes, and linkages in international law are the issues explored by international law experts in this section. Barnhoorn and Wellens 1995 highlights interaction among international law, law of treaties and of remedies, treaty interpretation, amendment and adaptations, and state responsibility. Proctor 2005 approaches the subject from the legal aspects of defining law and money and extending the historical development of the concept through the technological challenges as they have emerged in today’s globalized world. On the other hand, Cane and Kritzer 2010 is an empirical study on vast areas of law, from particularly European and American perspectives, that takes into account not only the normative interpretations of law, but also the social practices of political, economic, and ethical importance. De Bellis 2010 lays out an interesting case of the interrelationship of domestic legal systems and international law regulatory regimes, on the one hand, while also, in discussing mechanisms of this hybrid approach, pointing to very important issues of accountability and legitimacy. Akehurst 1987 engages in an interesting debate on the interrelationship of municipal law, international law, and international economic law and on questions of jurisdiction and the legal personality of international law itself. The conceptual debate on the issue is taken up in Malanczuk 2002, which throws light on the problems when it comes to norms of municipal law and issues of state sovereignty.
Akehurst, Michael B. A Modern Introduction to International Law. 7th ed. London: Allen and Unwin, 1987.
Save Citation »Export Citation » Share Citation »
The broader scope of international law is debated particularly with a narrower focus on whether it is really law; a good discussion of international organizations, dispute settlement, immunity, and jurisdiction issues.
Find this resource:
Barnhoorn, L. A. N. M., and Karel C. Wellens, eds. Diversity in Secondary Rules and the Unity of International Law. The Hague: Martinus Nijhoff, 1995.
Save Citation »Export Citation » Share Citation »
The international law debate from the perspectives of a united approach is explored thoroughly in this collection of articles edited by Barnhoom and Wellens. The chapter on General Agreement on Tariffs and Trade (GATT) law and another on European Community law present special cases of international law.
Find this resource:
Cane, Peter, and Herbert M. Kritzer, eds. The Oxford Handbook of Empirical Legal Research. New York: Oxford University Press, 2010.
DOI: 10.1093/oxfordhb/9780199542475.001.0001Save Citation »Export Citation » Share Citation »
A classic study of empirical research, focusing on legal systems and institutions. Part 1 deals with institutional empirical legal research, and Part 2 treats regulations, international law, contracts, and financial markets, among other topics. It is a classic reference book for academics and research students.
Find this resource:
de Bellis, Maurizia.The New Public Law in a Global (Dis)Order: A Perspective from Italy. Jean Monnet Working Paper 17/10. New York: Jean Monnet Center for International and Regional Economic Law and Justice, 2010.
Save Citation »Export Citation » Share Citation »
The author addresses different models of private norms as used in public regulation within domestic legal orders—“incorporation” and “reference” together with their advantages, limits, and systemic implications. The three instances of the use of international private standards within domestic legal system are analyzed.
Find this resource:
Malanczuk, Peter. Akehurst’s Modern Introduction to International Law. London: Routledge, 2002.
Save Citation »Export Citation » Share Citation »
Malanczuk brings into light the regulation of foreign businesses and corporations and international institutions that involve several factors of production (persons and capital) on the territorial jurisdiction of another state, on the one hand, and the international transactions involving goods, services, and capital, on the other.
Find this resource:
Proctor, Charles. Mann on the Legal Aspect of Money. 6th ed. Oxford: Oxford University Press, 2005.
Save Citation »Export Citation » Share Citation »
A classic work originally published in 1939, now comprehensively updated and revised by Proctor. It addresses dissenting issues of monetary sovereignty, monetary union, and legal aspects of contractual obligations as they are linked based on the Treaty of Rome as well as currency value and exchanges, especially the confrontational views on the renminbi’s value. The book is important for legal practitioners and academicians.
Find this resource:
As a Component of International Law
Bamford 2011 covers contractual duties and complex fiduciary relationships emanating from contractual obligations involving structured financial products. Trachtman 2008 uses a social-scientific approach to differentiate between efficiency in the allocation of governmental authority and efficiency in the market, the latter relating to the economics of international law and not to law itself. This work contrasts with Goldsmith and Posner 2005. Trachtman 2008 provides a coherent framework of international law on jurisdictions, treaties, customs, organizations, and dispute settlement, whereas the scope in Goldsmith and Posner 2005 is narrower. Kindleberger and Aliber 2005 (cited under Causes of Financial Crisis) employs artistic anecdotes and elegant epigrams in bringing out the linkages between various episodes of financial crisis. Again, this work contributes to undermining “the pure efficient markets theory” of economics that is under attack by behavioral economists, who label markets “irrational.” International law constitutes a rational choice theory that states employ to further their national interest, which is far beyond an interest defined solely by an appetite for power or security, per Goldsmith and Posner 2005. Serious debate is ongoing on compliance by international financial institutions with both customary international law and general principles of law. Sebastianutti 2009 is the first of a series of four articles that explores the nature of international financial law as an academic and professional discipline. Bradlow and Hunter 2010 raises unique questions on the accountability of international organizations, in general, and international financial institutions, in particular. The contributors authoritatively reveal the structural deficiencies and the inherently imprecise and flexibly drafted mandate of those institutions that call for reform. Jackson 1999 includes articles such as “Fragmentation or Unification among International Institutions: The World Trade Organization,” “The Economic Court of the Commonwealth of Independent States,” and “Fragmentation or Unification: Some Concluding Remarks” that generate debate and bring to light different perspectives in an effort to strengthen the development of international financial law.
Bamford, Colin. Principles of International Financial Law. Oxford: Oxford University Press, 2011.
Save Citation »Export Citation » Share Citation »
This is a textbook addressing the legal principles of common law for intangible financial instruments and transactions. The book is equally good for non–common law practitioners and those who are not lawyers.
Find this resource:
Bradlow, Daniel D., and David Hunter, eds. International Financial Institutions and International Law. Alphen aan den Rijn, The Netherlands: Kluwer, 2010.
Save Citation »Export Citation » Share Citation »
The book emphasizes that international financial institutions have a critical role to play but that they need to be redesigned for effective delivery and legitimacy. The topics covered include operations and responsibilities, municipal law and immunity issues, and politico-legal considerations, including Third World perspectives.
Find this resource:
Goldsmith, Jack L., and Eric A. Posner. The Limits of International Law. Oxford: Oxford University Press, 2005.
Save Citation »Export Citation » Share Citation »
This book focuses on three topics: the role of custom and international law, treaties as a form of cooperative agreement, and rhetoric and morality in international law.
Find this resource:
Jackson, John H. “Fragmentation or Unification among International Institutions: The World Trade Organization.” N.Y.U. Journal of International Law and Politics 31.4 (1999): 679–933.
Save Citation »Export Citation » Share Citation »
Various issues for debate include state sovereignty, the interdependent global economy, constitutionalism, and the interaction and linkages between domestic rules and international standards.
Find this resource:
Sebastianutti, Paul. “What Is This Thing Called International Financial Law?” Law and Financial Markets Review 3.1 (2009): 64–71.
Save Citation »Export Citation » Share Citation »
This article highlights the interactions among domestic laws, domestic conflict rules, and international treaties.
Find this resource:
Trachtman, Joel P. The Economic Structure of International Law. Cambridge, MA: Harvard University Press, 2008.
Save Citation »Export Citation » Share Citation »
Trachtman applies an overarching theoretical model of “rational analysis” to international law. The book is especially valuable for policymakers to assist in providing a clear understanding of which choices should be adopted to maximize values.
Find this resource:
The Role of Central Banks
The relationships among lender of last resort (LoLR), liquidity, banking failures, panic, and risk have been explored to build a robust and resilient banking system. Haubrich and Thomson 2008 analyzes the central banking responsibilities and the umbrella supervisory role of the US Federal Reserve. King 2010 dwells upon Bagehot’s LoLR principle and reviews reform measures, including Volcker’s rule of “limited purpose banking.” Cecchetti and Disyatat 2010 defines the role of the central bank as the lender of last resort with reference to the global financial crisis in treating under what conditions the central bank’s money should be made available, which brings into the discussion the moral hazard argument.
Cecchetti, Stephen G., and Piti Disyatat. “Central Bank Tools and Liquidity Shortages.” FRBNY Economic Policy Review 16.1 (August 2010): 29–42.
Save Citation »Export Citation » Share Citation »
Three types of liquidity shortages—at central banks, at specific institutions, and at market level—are analyzed along with respective tools for control that the central banks may employ. The authors provide a perspective on some of the recent responses initiated by different central banks during the financial crisis of 2008.
Find this resource:
Haubrich, Joseph G., and James B. Thomson. “Umbrella Supervision and the Role of the Central Bank.” Journal of Banking Regulation 10.1 (2008): 17–27.
DOI: 10.1057/jbr.2008.21Save Citation »Export Citation » Share Citation »
Deregulation and consequent financial consolidations are discussed in this brief article. Available online for purchase or by subscription.
Find this resource:
King, Mervyn. “Banking from Bagehot to Basel, and Back Again.” Speech presented at the Second Bagehot Lecture Buttonwood Gathering, New York City, 25 October 2010.
Save Citation »Export Citation » Share Citation »
Explores various options to reform the financial architecture after the financial crisis of 2008. King considers Basel III to be an incomplete answer to the threats posed by the systemic failures, which require drastic reforms.
Find this resource:
International Financial Markets
Alexander, et al. 2006 discusses strengthening the global financial system by introducing accountability and enhanced participation, which would bring legitimacy to the existing system. Interestingly, although the book was written before the 2008 crisis, the proposals for managing systemic risk and reforming the broader international financial architecture to restructure international financial law are more than ever necessary in light of the crisis. However, to acquire an introductory understanding of the operations of international financial markets, Valdez and Molyneux 2010 is the best first guide. Kindleberger 2007 serves as a comprehensive background reading, particularly for European financial markets. On the new system of regulation of financial markets and exchange laws, especially after the enactment of the Financial Services and Markets Act (2000), together with including electronic transactions and ecommerce, Blair and Walker 2007 provides a comprehensive guide. Larosière, et al. 2009 (cited under Legislative Reforms) presents a detailed review of the necessary repair needed at the European Union (EU) and global levels. Scott and Wellons 2012, in discussing a government policy and regulatory approach, provides a detailed and up-to-date account of the changes taking place in financial products and transactions over more than two decades. Finally, McCormick 2010 markets the concept of “greening” of financial institutions in providing legal risk management strategies.
Alexander, Kern, Rahul Dhumale, and John Eatwell. Global Governance of Financial Systems: The International Regulation of Systemic Risk. Oxford: Oxford University Press, 2006.
Save Citation »Export Citation » Share Citation »
Written from the regulator’s point of view in discussing the dynamics of public goods, systemic risk, and incentives as well as providing an analysis of the sufficiency of the regulations in force prior to the global financial crisis. The authors find that current efforts at international regulation are inefficient and fragmented, and lack political legitimacy. Therefore, an institutional approach to reform the existing system is necessary.
Find this resource:
Blair, Michael, and George A. Walker, eds. Financial Markets and Exchanges Law. Oxford: Oxford University Press, 2007.
Save Citation »Export Citation » Share Citation »
This book deals with a range of United Kingdom financial markets and also contains chapters on an Islamic securities exchange, MiFID, alternative trading systems, and investment. The contributors are mainly experts from the UK Financial Services Authority. Targets law professionals.
Find this resource:
Kindleberger, Charles P. A Financial History of Western Europe. London: Routledge, 2007.
Save Citation »Export Citation » Share Citation »
A classic book, covering finance, banking, capital, bank money, the gold standard, private and public finance, foreign transfers and investments, interwar finance, the 1929 depression, and post–World War II finance, among other topics. Recommended reading for graduates and undergraduates, with an extensive bibliography. First published in 1993.
Find this resource:
McCormick, Roger. Legal Risk in the Financial Markets. 2d ed. Oxford: Oxford University Press, 2010.
Save Citation »Export Citation » Share Citation »
A historical review, from Hammersmith to Lehman Brothers, of the origins, causes, and effects of financial crises and the interrelationship of law, regulation, and globalization of legal risk.
Find this resource:
Scott, Hal S., and Philip A. Wellons. International Finance: Transactions, Policy, and Regulation. New York: Foundation, 2012.
Save Citation »Export Citation » Share Citation »
The book in its various editions (the latest is the nineteenth) comprehensively covers basic concepts of financial transactions and financial instruments, including securities, derivatives, bonds, mutual funds, swaps, etc., and the international aspects of domestic markets in considering the reforms called for in the United States, the European Union, Japan, and particularly in emerging markets and international financial institutions. A very comprehensive textbook, equally beneficial for students and financial experts.
Find this resource:
Valdez, Stephen, and Philip Molyneux. An Introduction to Global Financial Markets. 6th ed. Basingstoke, UK: Palgrave Macmillan, 2010.
Save Citation »Export Citation » Share Citation »
An easy-to-read, straightforward book that gives students an understanding of money markets, bonds, securities, stocks, hedge funds, derivatives and derivative products such as calls, options, futures and commercial versus investment banking, etc. Professionals in banking, economics, and finance will find it equally valuable.
Find this resource:
Regulation and Supervision
Due to stringent domestic regulations, the period after Bretton Woods resulted in reasonable financial stability for almost twenty-five years. Ferran and Goodhart 2001 provides an authoritative cross section of views from policymakers, regulators, and financial law scholars, who underline the need for formal legal institutions for both microeconomic and macroeconomic stability. While taking an interdisciplinary approach and combining law and economics with regulatory regimes, the contributors cover important themes in the development of international financial law. Schooner and Taylor 2010 melds global banking policies with the theory of banking laws to present improved international financial regulatory standards. The authors address the financial crisis of 2008 and draw largely on the regulatory mechanisms rather than on related laws and rules. On the other hand, Tietje and Lehmann 2010 emphasizes encouraging regulatory competition. The authors are of the view that financial legislation in no way forms a consistent system due to differing causes such as information asymmetry, market behavior, and the content and purpose of legislation. Hence, with regard to supervision and regulation, they emphasize optimal harmonization and the notions of “meta norms,” “transnational” character of financial products, “form follows function,” etc., to argue the case for allowing regulatory competition that may serve as a “permanent laboratory” to test and breed “sound” regulatory systems. Shin 2005 makes an interesting commentary on Rajan’s article on financial development (Rajan 2005). In a very intriguing way, Shin 2005 draws a simile between the Millennium Bridge and market failure, in which the wobble feeds on itself and aggravates the crisis despite the best measures taken to stop it. Pozsar, et al. 2010 shows how the shadow banking sector’s development has threatened systemic stability. The authors document how the shadow banking sector is distinct from traditional banking.
Ferran, Eilís, and C. A. E. Goodhart, eds. Regulating Financial Services and Markets in the 21st Century. Oxford: Hart, 2001.
Save Citation »Export Citation » Share Citation »
The themed sections of the book address the objectives of regulation, the duties of regulators, and the principles for ensuring regulators’ accountability. Further, European regulations and international regulations are explored to advocate on behalf of a global supervisor. The role of watchdogs is considered in drawing a hypothetical comparison of regulatory functions for ten years retrospectively and prospectively as part of an effort to redesign a future regulatory mechanism.
Find this resource:
Pozsar, Zoltan, Tobias Adrian, Adam B. Ashcraft, and Hayley Boesky. Shadow Banking. Staff Report 458. New York: Federal Reserve Bank of New York, 2012.
Save Citation »Export Citation » Share Citation »
The report addresses the economic role played by shadow banking in the operation of financial markets and financial stability and draws attention to areas where policy changes are essential.
Find this resource:
Rajan, Raghuran G. Has Financial Development Made the World Riskier? Working Paper 11728. Cambridge, MA: National Bureau of Economic Research, 2005.
DOI: 10.3386/w11728Save Citation »Export Citation » Share Citation »
Written primarily for central bankers, the author proposes to alter the way they react to short-run price changes so that, at the time of crisis, collective efforts should not undermine efforts to save the system. Without the political will to implement regulatory systems, no proposed solutions can provide an adequate safeguard.
Find this resource:
Schooner, Heidi M., and Michael W. Taylor. Global Bank Regulations: Principles and Policies. Burlington, MA: Academic Press, 2010.
Save Citation »Export Citation » Share Citation »
A comprehensive book written in plain language that defines banking and finance concepts, it is a must read for students as well as banking and regulatory professionals. The principles set forth by the Basel Committee and the European Central Bank for regulation and supervision are reviewed.
Find this resource:
Shin, Hyun S. “Commentary: Has Financial Development Made the World Riskier?” Proceedings from Federal Reserve Bank of Kansas City (September 2005): 381–386.
Save Citation »Export Citation » Share Citation »
Shin criticizes some of the suggestions given in Rajan 2005, such as “balancing frames,” and adds that, unless collective “de-escalation” is pursued by all states, any such measures adopted by one state would weaken that nation’s financial industry.
Find this resource:
Tietje, Christian, and Matthias Lehmann. “The Role and Prospects of International Law in Financial Regulation and Supervision.” Journal of International Economic Law 13.3 (2010): 663–682.
DOI: 10.1093/jiel/jgq030Save Citation »Export Citation » Share Citation »
The article talks about sound practices to be combined across jurisdictions. The authors affirm that “there is no one-size-fits-all approach” in the design of integrated international financial regulation and that the presence of “herd behavior” causes the collapse of the whole system. Available online for purchase or by subscription.
Find this resource:
Causes of Financial Crisis
Posner 2009 analyzes the failure of the banking industry and financial markets in 2008 and points out the poor performance of economists in anticipating the deep depression that ensued. Posner, a doyen of market-oriented law and economics, expounds his thoughtfully transformed views in seeking a balance between regulatory practices and market forces under a capitalist system. Posner 2010 is more focused on the events of 2009, which primarily entailed responses by governments to the crisis in the form of regulations, legislation, bailouts, etc. The author is critical of the anodyne reforms that governments followed. Arner 2009 addresses the causes of the financial crisis from a historical perspective while analyzing significant regulatory responses from 1983 onward. The discussion concludes that financial regulatory designs should extend beyond addressing systemic risk to the broader goals of financial stability. Kindleberger and Aliber 2005 is a classic work that details how mismanagement of credit and finance led to financial explosions over the centuries. Lastra and Wood 2010 contrasts banking and financial crises and liquidity versus solvency/capital crises in finding that the latter have the potential to destabilize the international financial architecture. The authors call for an immediate crisis resolution mechanism. They conclude that only the fear of “failure” of the banking sector could be the deterministic reform among other legislative and systemic reforms being pursued. Blundell-Wignall and Atkinson 2008 points to the causality of various distortions, such as liquidity bubbles, securitization structures, crisis handling by the Financial Stability Forum FSF through Basel regulations, etc. Specific policy reforms are suggested after examining in detail the particular causes of the financial crisis in Blundell-Wignall and Atkinson 2009. According to Coffee 2009, three activities, namely those that led to the housing bubble, the acts of credit rating agencies, and deregulation, coupled with the collapse of investment banks, constitute the causes of the global financial crisis.
Arner, Douglas W. “The Global Credit Crisis of 2008: Causes and Consequences.” International Lawyer 43 (2009): 101–190.
Save Citation »Export Citation » Share Citation »
The structure and mechanisms of complex financial products, such as securitization and credit default swaps (CDS), are explained to highlight how they culminated in the global financial crisis. The second part of the article discusses the domestic and international responses that emerged to stabilize the global financial system in 2008 and 2009, focusing on the role played by the Financial Stability Board and the Group of Twenty Finance Ministers and Central Bank Governors (Group of 20, G-20).
Find this resource:
Blundell-Wignall, Adrian, and Paul Atkinson. “The Sub-prime Crisis: Casual Distortions and Regulatory Reforms.” In Lessons from the Financial Turmoil of 2007 and 2008. Edited by Paul Bloxham and Christopher Kent, 55–100. Sydney: Reserve Bank of Australia, 2008.
Save Citation »Export Citation » Share Citation »
A detailed and thorough article on the significance of causal factors in relation to conditioning factors. It also lists ten elements required for a sound global regulatory system.
Find this resource:
Blundell-Wignall, Adrian, and Paul Atkinson. “Origins of the Financial Crisis and Requirements for Reform.” Journal of Asian Economics 20.5 (2009): 536–548.
DOI: 10.1016/j.asieco.2009.07.009Save Citation »Export Citation » Share Citation »
In-depth analysis of areas including residential mortgage-based securities, credit default swaps and arbitrage opportunities in capital regulations around the globe are used to assess the leverage position of international banks at the time of the crisis in 2008. Available online for purchase or by subscription.
Find this resource:
Coffee, John C. “What Went Wrong? A Tragedy in Three Acts.” University of St. Thomas Law Journal 6.2 (2009): 403–420.
Save Citation »Export Citation » Share Citation »
Gives a succinct analysis of the American regulatory structure, which is neither centralized nor “twin peak”; rather, it resembles a “Himalayan” model that has caused balkanization in place of a much-needed consolidated regulatory approach.
Find this resource:
Kindleberger, Charles P., and Robert Z. Aliber. Manias, Panics, and Crashes: A History of Financial Crises. 5th ed. Hoboken, NJ: Wiley, 2005.
DOI: 10.1057/9780230628045Save Citation »Export Citation » Share Citation »
A comprehensive history and in-depth review of financial crises, commencing from the South Sea Bubble. New chapters have been added in the new edition on Norway, Finland, Sweden, Japan, and East Asia.
Find this resource:
Lastra, Rosa M., and Geoffrey Wood. “The Crisis of 2007–09: Nature, Causes, and Reactions.” Journal of International Economic Law 13.3 (2010): 531–550.
DOI: 10.1093/jiel/jgq022Save Citation »Export Citation » Share Citation »
This article groups the causes of the financial crisis in 2008 under ten headings and includes analysis of the various responses that followed while also distinguishing between financial crises and banking crises. Available online for purchase or by subscription.
Find this resource:
Posner, Richard A. A Failure of Capitalism: The Crisis of ’08 and the Descent into Depression. Cambridge, MA: Harvard University Press, 2009.
Save Citation »Export Citation » Share Citation »
Posner takes a deeper look at the failure of the government in calibrating the risk potential and the losses that resulted due to inept measures taken relative to the gravity of the crisis.
Find this resource:
Posner, Richard A. The Crisis of Capitalist Democracy. Cambridge, MA: Harvard University Press, 2010.
Save Citation »Export Citation » Share Citation »
Posner strongly emphasizes the need for meaningful reforms of rating and regulatory agencies, including reestablishing, in the United States, insulation of banking activities as provided for in the Glass-Steagall Act. Again, a clear shift toward more government and away from the position of Chicago acolytes of the perfect market approach is visible in this work. A good read even for generalists.
Find this resource:
Redesigning the International Financial Architecture
Eichengreen and Portes 1997 discusses reform of the international financial architecture in the wake of the Asian financial crisis of 1997. Taking this a step further, Eichengreen 2009 proposes the idea of a World Financial Organization (WFO). The article offers technical proposals, including a countercyclical International Monetary Fund (IMF) charge on capital, a scarce currency clause, a global systemic risk facility, and a multilateral insolvency trust for international banks as well as an IMF governance structure. As a first step, a secretariat, staff, and supervisory services may be created on the basis of a meaningfully reformed governance structure at the IMF (Eichengreen and Portes 1997, Golden and Burn 2010). Some scholars however, advocate a synthesis of both the systems, i.e., combining hard law–based approaches with soft law to redesign the international financial architecture. However, in other works writers call for maintaining the existing system, including Brummer 2010. The author underlines the importance of the enforcement mechanism under any system of law, which is nonexistent in international financial law. Many political theorists, especially realists who draw little distinction between international law and international politics, affirm that it is always power, and not law, that serves as the basis for the promulgation of international standards. Brummer 2011, however, advocates on behalf of the soft nature of financial law, which is bolstered by reputational and market discipline along with institutional sanctions framed by domestic regulatory and administrative agencies. This approach is endorsed in Guzman and Meyer 2010. Arner and Buckley 2010 affirms that the existing regulatory structures failed to deliver effectively in 2007, and the need is expressed to consolidate the existing loosely formed network of the IMF, the World Trade Organization (WTO), the Bank for International Settlements (BIS), the G-20, the European Central Bank (ECB), Financial Stability Forum (FSF) (renamed Financial Stability Board (FSB)), the Basel Committee on Banking Supervision (BCBS), the International Organization of Securities Commissions (IOSCO), and then the G-7 and G-10. The authors find that the mushrooming of international fora created a complex but ineffective structure. Garicano and Lastra 2010 combines an organizational economics approach with financial regulation to suggest principles for domestic re-regulation to create a more centralized and hierarchical financial architecture. See also Eichengreen 2002 and Golden and Burn 2010.
Arner, Douglas W., and Ross P. Buckley. “Redesigning the Architecture of the Global Financial System.” Melbourne Journal of International Law 11.2 (2010): 185–221.
Save Citation »Export Citation » Share Citation »
The Bretton Woods system was based on global trade and fixed exchange rates in which finance was essentially regulated domestically and, therefore, international regulations for finance never developed. The argument is made to restructure markets to reflect the developments taking place in the increasingly globalized financial markets.
Find this resource:
Brummer, Chris J. “Why Soft Law Dominates International Finance—and Not Trade.” Journal of International Economic Law 13.3 (2010): 623–643.
Save Citation »Export Citation » Share Citation »
While emphasizing the importance of the force of sanctions in international financial law, Brummer suggests introducing a few more “teeth” to the existing soft law structure to make it an effective mechanism. He proposes adding a modest agenda of reforms to the existing architecture, which he calls “hard” soft law
Find this resource:
Brummer, Chris J. “How International Financial Law Works (and How It Doesn’t).” Georgetown Law Journal 99 (2011).
Save Citation »Export Citation » Share Citation »
Brummer lists the features of international financial law, namely separation of powers in the context of domestic regulators, international financial standard setters, and regulatory and market applicability. He emphasizes that international financial law does not operate in a purely soft law manner; rather, in many ways both hard law and soft law operate along a spectrum and are not dichotomous or qualitatively different forms of regulatory controls. His position is one endorsed in Guzman and Meyer 2010.
Find this resource:
Eichengreen, Barry. Financial Crises and What to Do about Them. Oxford: Oxford University Press, 2002.
DOI: 10.1093/acprof:oso/9780199257430.001.0001Save Citation »Export Citation » Share Citation »
This book explains why no definitive solutions exist to the recurring financial crises. After giving a pithy account of crisis prevention and crisis management, Eichengreen draws on the lesson taken from the crises in Turkey and Argentina and provides a way forward. He points out what is lacking in the international financial architecture.
Find this resource:
Eichengreen, Barry. Out of the Box Thoughts about the International Financial Architecture. IMF Working Paper WP/09/116. Washington, DC: International Monetary Fund, 2009.
Save Citation »Export Citation » Share Citation »
Proposes short-term and medium-term “out-of-the-box” reforms consisting of an expanded role for the IMF by transforming its obsolete quotas into an automatic process. Doing so could also address the problem of chronic surplus and the need for an expanded role for the Special Drawing Rights (SDR). Among reforms beyond IMF reform, he discusses reimposing Glass-Steagall–like restrictions and establishing a new agency to deal with cross-border bank insolvencies.
Find this resource:
Eichengreen, Barry, and Richard Portes. “Managing Financial Crises in Emerging Markets.” Paper presented at the Federal Reserve Bank of Kansas City’s annual economics conference, Jackson Hole, WY, 28–30 August 1997.
Save Citation »Export Citation » Share Citation »
Eichengreen and Portes stress the need for reform of the IMF while analyzing the causes of the Mexican crisis of 1994–1995 and the Asian financial crisis of 1997 as well as the consequences of these crises for emerging markets.
Find this resource:
Garicano, Luis, and Rosa M. Lastra. “Towards a New Architecture for Financial Stability: Seven Principles.” Journal of International Economic Law 13.3 (2010): 597–621.
DOI: 10.1093/jiel/jgq041Save Citation »Export Citation » Share Citation »
The authors analyze the prevailing regulatory bodies in 2007 in the United States and the United Kingdom. They make suggestions for a new EU structure based on the premise that, to advance synergy and coordination, Europe needs integration on the pattern of the “Champion’s League” for pan-European financial institutions, which consists of a hybrid of national and European rules. Available online for purchase or by subscription.
Find this resource:
Golden, Jeffrey, and Lachlan Burn. “Editors’ Note.” Capital Markets Law Journal 6.1 (2010): 1–2.
DOI: 10.1093/cmlj/kmq037Save Citation »Export Citation » Share Citation »
Golden and Burn argue for the creation of an International Court of Finance, and they provide another perspective to international financial law stemming from arbitration regimes.
Find this resource:
Guzman, Andrew T., and Timothy Meyer. “International Soft Law.” Journal of Legal Analysis 2.1 (August 2010).
Save Citation »Export Citation » Share Citation »
A discussion on the nature and usage of soft law that presents four theories describing why and under what situations states prefer employing soft law and noting that this state behavior itself provides justification for the coherence of soft law as the analytical category
Find this resource:
Legislative Reforms
Charnovitz 2010 (cited under International Trade Law) is a comparative study on government legislation. The author criticizes, in particular, the new Dodd–Frank legislation in the United States and underlines the lack of international regulation of financial markets, markets that are the most regulated sector under domestic law. In the EU, a major step in legalization has been taken with the Treaty Establishing the European Stability Mechanism (ESM), signed on 11 July 2011. It marks a significant achievement by the European Union in introducing elements of accountability and enforcement. Lopes 2010 is a very brief article that draws a historical comparison to the recent financial crisis and reforms while analyzing the reenactment in July 2010 of the Glass-Steagall Act, which was first adopted in the 1930s in reaction to the Great Depression. Endorsing that action, Skeel 2011 suggests simple reforms to change the role of the regulators and the government with respect to free-market mega financial institutions. The author also points out major lacunas in the Dodd-Frank legislation, which emerged as a consequence of the failure of Lehman Brothers and the enactment of bailouts of AIG and Bear Stearns in the United States. Larosière, et al. 2009, in the aftermath of the recent financial crisis in the EU, analyzes the causes of the recent financial crisis and lays down a framework for reform of the EU, which consists of adoption of a new regulatory agenda, stronger coordinated supervision, and effective crisis management procedures. Arner and Norton 2009 emphasizes appropriate insolvency measures in individual jurisdictions, given the absence of any international framework. Again, in considering the need for systemic stability, the authors recommend ways to achieve such stability through coordination of national regulatory efforts until a supranational crisis resolution authority can be established (Greene, et al. 2010).
Arner, Douglas W., and Joseph Norton. “Building a Framework to Address Failure of Complex Global Financial Institutions.” Hong Kong Law Journal 39.1 (2009).
Save Citation »Export Citation » Share Citation »
The cases of major bankruptcies of financial conglomerates such as Lehman Brothers, Merrill Lynch, AIG, Halifax Bank of Scotland, and BCCI are discussed from legal and regulatory standpoints, and the authors relate how these insolvencies undermined the stability of the global financial system in 2008.
Find this resource:
Greene, E. F., K. L. McIlwain, and J. T. Scott. “A Closer Look at ‘Too Big to Fail’: National and International Approaches to Addressing the Risks of Large Interconnected Financial Institutions.” Capital Markets Law Journal 5.2 (2010): 117–140
DOI: 10.1093/cmlj/kmq005Save Citation »Export Citation » Share Citation »
The authors highlight four primary approaches to contain the size of “too big to fail” institutions that would ensure less damage to the system from any upcoming disruption, given the absence of an effective systemic risk regulatory authority. Available online for purchase or by subscription.
Find this resource:
Larosière, Jacques D., Leszek Balcerowicz, Otmar Issing, et al. Report of the High Level Group on Financial Supervision in the EU. Brussels: European Union, 2009.
Save Citation »Export Citation » Share Citation »
A very important report that identifies weak regulatory and supervisory areas that contributed to the financial crisis. The areas in which repairs are needed most are also analyzed. The report outlines a blueprint for the EU to be given a new regulatory agenda with enhanced coordinated supervision and effective crisis management procedures.
Find this resource:
Lopes, Jacqueline. “Re-enactment of the Glass Steagall Act 1933: Is This a Step in the Right Direction for Global Financial Reform?” Law and Financial Markets Review 4.4 (July 2010): 428–432.
DOI: 10.5235/175214410791942805Save Citation »Export Citation » Share Citation »
The analysis is packed with viewpoints on the deficiencies in the reenacted legislation and the impact of the reenactment on the US market and at the international level. Lopes proposes a multilateral international response entailing a strict “catch-all” regulatory approach based on “substance” and not on the form of legal risk. Available online for purchase or by subscription.
Find this resource:
Skeel, D. A. The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences. Hoboken, NJ: Wiley, 2011.
Save Citation »Export Citation » Share Citation »
The legislative framework in the United States that emerged after the failure of a string of financial institutions in 2008 is reviewed and analyzed along with the roles played by major American personalities in highlighting areas still in need of reforms. This was originally a research paper that is now available as a comprehensive book that takes into account the entire legislative history of the reform effort in the United States.
Find this resource:
Treaty Establishing the European Stability Mechanism (ESM), 11 July 2011.
Save Citation »Export Citation » Share Citation »
The treaty has been signed by the seventeen countries within the euro area; the ESM is also open to EU member countries outside the euro area for ad hoc participation in financial assistance operations. The tasks will be taken over by ESM in July 2013 and the European Financial Stabilization Mechanism (EFSM).
Find this resource:
Securities Regulation
Arner 2002 points out the disparities between domestic legislation and regulatory standards that hinder the development of a “global prospectus” or “international passport prospectus.” The author provides a comprehensive review of literature relating to securities legislation and analyzes the implementation of standards in important regional jurisdictions, including the United States, Canada, and the European securities market within the European Monetary Union. Caprio, et al. 2010 explores the question: “had Basel II already failed or was it excessive globalization that brought the system down?” In addition, the author suggests solutions for developing countries.
Arner, Douglas W. “Globalization of Financial Markets: An International Passport for Securities Offerings?” International Lawyer 35.4 (2001): 1543–1588.
Save Citation »Export Citation » Share Citation »
The article highlights three important trends in the international securities markets and these trends underscore the need for harmonization of listings and for standards for securities on the international stock exchanges. The last part of the article deals with the international harmonization of accounting standards, the role of the International Accounting Standards Committee (IASC), and the relationship between the IOSCO and the IASC. Available online for purchase or by subscription.
Find this resource:
Caprio, Gerard J., Asli Demirgüç-Kunt, and Edward J. Kane. “The 2007 Meltdown in Structured Securitization: Searching for Lessons, Not Scapegoats.” World Bank Research Observer 25.1 (2010): 125–155.
DOI: 10.1093/wbro/lkp029Save Citation »Export Citation » Share Citation »
An exploratory article looking into what went wrong with securitization, financial engineering, and risk management and risk ratings done by credit rating agencies as well as examining accounting standards, especially the mark-to-market principle. Available online for purchase or by subscription.
Find this resource:
Basel I, II, III
Ashraf, et al. 2011 traces the successive episodes of financial crisis that led to the formation of Basel I and Basel II while highlighting the vulnerable areas under the Basel regulations, specifically under Basel III, that may continue to threaten financial stability. According to Moosa 2010, allowing the use of banks’ internal models to determine capital charges through the use of a “one-size-fits-all” formula, which inevitably leads to banking and financial market instability, constitutes one of the major flaws in Basel II approaches. Ahmed 2009 affirms that regulatory reforms required under Basel II may no longer be relevant as Basel II moves to Basel III, but Basel II provides a useful perspective in the process of adopting Basel III minimum ratios. It is important to judge how new rules, to be contained in Basel III for capital and liquidity enhancements, would affect the cost of transactions both for banks and for consumers. Elliott 2010 gauges the extensive ramifications of the new restrictions. Ojo 2010 constitutes an interesting addition to the literature in highlighting the insufficiency of regulatory contents, including the prescribed ratios for capital and liquidity in Basel III that have been labeled as the principal triggers for the crisis in 2008. Blundell-Wignall and Atkinson 2010 points to areas that have not been considered under Basel III. Elliott 2010 and Hellwig 2010 both take an unconventional approach in proposing a thorough overhaul of the existing financial regulatory system, which is based on risk-calibrated capital requirements. The authors criticize the existing system in providing a brief history that treats the conceptual deficits of capital regulations and the illusion of the measurability of risk, which proved insufficient in the wake of the threat to systemic stability for failing to provide any theoretical underpinnings. Admati, et al. 2011 debates proposed capital regulations if equity capital proves too expensive. The authors confirm in their findings that it is not socially expensive. Finally, Weber and Darbellay 2008 throws light on how Basel regulations interact with ratings.
Admati, Anat R., Peter M. DeMarzo, Martin F. Hellwig, and Paul C. Pfleiderer. Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation: Why Bank Equity Is Not Expensive. Stanford Graduate School of Business Research Paper 2065. Stanford, CA: Graduate School of Business, Stanford University, 2011.
Save Citation »Export Citation » Share Citation »
An analytical argument concerning social versus private costs of equity and of inadequacy theory to confirm the findings that highly leveraged banks are not optimal even for themselves and carry the potential to destabilize not only domestic systems, but also the overall architecture.
Find this resource:
Ahmed, Md. Kabir. “The Role of an Explicit Subordinated Debt Policy in the Smooth Transition to Basel II: Developing Economy Perspective.” Journal of Banking Regulation 10.3 (2009): 221–233.
DOI: 10.1057/jbr.2009.2Save Citation »Export Citation » Share Citation »
Kabir talks about the absence of a level playing field for implanting Basel II capital adequacy requirements at the banks operating in developed and developing countries He identifies the supporting role of subordinate debt, which may be used in the developing world during a transition to Basel II. Available online for purchase or by subscription.
Find this resource:
Ashraf, Uzma, Douglas W. Arner, and I. M. Gill. “A Road to Financial Stability.” Global Journal of Business Research 5.5 (2011): 71–79.
Save Citation »Export Citation » Share Citation »
This article sketches the historical account of the regulatory cum supervisory responses to financial crises since the end of Bretton Woods. A review of the interrelationship of regulations, including Basel I, II, and III; of different forums, including the G-7, G-20, FSB, Organization for Economic Co-operation and Development (OECD); and of legislation, including the Financial Services and Markets Act FSMA, Dodd Frank Act, etc., is included.
Find this resource:
Blundell-Wignall, A., and P. Atkinson. “Thinking beyond Basel III: Necessary Solutions for Capital and Liquidity.” OECD Journal: Financial Market Trends 1 (2010): 9–33.
Save Citation »Export Citation » Share Citation »
The issue provides an in-depth analysis employing all the calculations from a comparison of Basel II and Basel III ratios and the regulatory limits to suggest areas that have not been taken into account, such as the system of “promises” under the shadow banking system, that can potentially serve as fertile grounds for the next crisis.
Find this resource:
Elliott, D. J. Basel III, the Banks, and the Economy. Washington, DC: Brookings Institution, 2010.
Save Citation »Export Citation » Share Citation »
A research work exploring Basel III that addresses broader ambiguities about what the Basel III rules are, how they would be implemented, what changes from the existing rules would follow, and what would be the likely effects of Basel III after its implementation.
Find this resource:
Hellwig, Martin. “Capital Regulations after the Crisis: Business as Usual? Bonn, Germany: Max Planck Institute for Research on Collective Goods, 2010.
Save Citation »Export Citation » Share Citation »
Hellwig proposes two out-of-the-box restructuring plans for capital regulations along with contesting the commonly held fallacy that higher equity requirements increase the cost of transactions for the banks by taking into account social and private costs, on the one hand, and public concerns versus private interests, on the other.
Find this resource:
Moosa, Imad A. “Basel II as a Casualty of the Global Financial Crisis.” Journal of Banking Regulation 11.2 (2010): 95–114.
DOI: 10.1057/jbr.2010.2Save Citation »Export Citation » Share Citation »
In this brief article, the author analyzes the content of Basel II to reveal inadequacies in the regulations, which caused systemic threats. Available online for purchase or by subscription.
Find this resource:
Ojo, Marianne. Preparing for Basel IV—Why Liquidity Risks Still Present a Challenge to Regulators in Prudential Supervision. SSRN eLibrary, 2010.
Save Citation »Export Citation » Share Citation »
The relationship of liquidity to the role of the lender of last resort and the Basel III regulations is analyzed to draw a conclusion that only market-based regulations are able to address the risks. Another out-of-the-box thought concerning Basel III is extension of capital regulations to the securities and insurance industry.
Find this resource:
Weber, Rolf H., and Aline Darbellay. “The Regulatory Use of Credit Ratings in Bank Capital Requirement Regulations.” Journal of Banking Regulation 10.1 (2008): 1–16.
DOI: 10.1057/jbr.2008.22Save Citation »Export Citation » Share Citation »
A critical work on the way Basel regulations treat credit ratings for bank capital requirements and the way these ratings affect financial markets, especially during an economic downturn. The authors find that it brings negative fallouts; hence, they recommend stronger supervision of these private entities. Available online for purchase or by subscription.
Find this resource:
Behavioral Approach
Since the 1980s, regulations have been adopted based on the notion that markets are essentially rational and highly efficient at allocating resources and that markets are generally self-policing and self-correcting (see Schooner and Taylor 2010, cited under Regulation and Supervision). The successive episodes of financial crises in Latin America, East Asia, and most recently, worldwide in 2008, have underscored the failure of this theory, namely that markets offer symmetric information and, hence, always act rationally (see Blundell-Wignall and Atkinson 2008, cited under Causes of Financial Crisis). It has become evident that unregulated free markets can pose devastating threats to the smooth functioning of financial markets, and so regulated regimes are necessary. The term animal spirits, was coined by John Maynard Keynes, and, like him, Akerlof and Shiller, in Akerlof and Shiller 2009, find that managing these animal spirits requires the steady hand of government because simply allowing markets to control and dictate affairs will lead to recurring episodes of financial instability. Reinhart and Rogoff 2009 reviews eight centuries of history, as the title suggests, of financial folly. Taleb 2007 describes the “black swan” as an event that is unpredictable and carries a massive impact, one for which, after the fact, we concoct an explanation that makes it appear less random and more predictable than it was.
Akerlof, George A., and Robert J. Shiller. Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism. Princeton, NJ: Princeton University Press, 2009.
Save Citation »Export Citation » Share Citation »
The first part of the book highlights the interplay of animal spirits with confidence, bad faith, corruption, and money and how these affect normal economic life. The second part of the book raises eight questions and shows how Reaganomics, Thatcherism, and rational expectations fail at a time of crisis.
Find this resource:
Reinhart, Carmen M., and Kenneth S. Rogoff. This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, 2009.
Save Citation »Export Citation » Share Citation »
The market gurus and the financial experts normally share a belief that markets are exceedingly stable just before the outbreak of a financial crisis. This mind-set is well explored in this book, and the authors substantiate their assertions with series of data.
Find this resource:
Taleb, N. N. The Black Swan: The Impact of the High Improbable. New York: Random House, 2007.
Save Citation »Export Citation » Share Citation »
The “black swan” symbolizes the state of affairs that transpired in 2008 after the crisis unfolded. By drawing analogies and quoting from episodes of the crisis, the author has identified many black swans.
Find this resource:
International Monetary Law
A voluminous work, Lowenfeld 2008 covers comprehensively the historical development of international economic law, including its formation and operations and the consequent collapse of the international monetary system. Lowenfeld 2010 summarizes in an historical review of the IMF through seven decades to point out its much restricted role in the advent of the floating currencies regime established after 1971 in the industrialized countries and its limited role under Article IV, suggesting reforms to the international monetary system. Lastra 2006 endeavors to rethink the role of international financial institutions in offering economic, historical, and legal perspectives for national, European, and international frameworks for monetary laws and financial regulation. Kindleberger 2007 (cited under International Financial Markets), written by a literary economist, narrates a history of continental financial crises and banking systems, including Italian, English, French, German and Spanish. Hagan 2010, written by the director of the Legal Department of the IMF, carries weight in stressing the need for a multilateral surveillance mechanism through increased access to information and the FSAP along with regulation of capital movement, which are now ignored by international regulatory regimes but that may threaten the future architecture of financial markets. Giovanoli and Devos 2010 constitutes a succinct collection of contributions from monetary and financial lawyers and academicians, who offer comments and criticisms of legislative and policy responses, crisis resolution mechanisms, the functioning and responsibilities of the IMF, and the roles of central banks. Fischer 2004 provides insight into the IMF’s functioning during the 1990s, a turbulent time, and suggests an enhanced role for the institution in acting as an international lender of last resort. Conway 2006 presents a critique of the IMF’s efforts to manage crises in the 1990s.
Conway, Patrick. “The International Monetary Fund in a Time of Crisis: A Review of Stanley Fischer’s IMF Essays from a Time of Crisis: The International Financial System, Stabilization, and Development.” Journal of Economic Literature 44.1 (March 2006): 115–144.
DOI: 10.1257/002205106776162690Save Citation »Export Citation » Share Citation »
An intelligent comparison of Fischer’s viewpoints with the critic’s opinions made during the same period time. For Conway, empirical evidence is essential in order to test the contentious issues that are lacking from the analysis of both, and, with that, he stresses a need for follow-up empirical research on the subject. Available online for purchase or by subscription.
Find this resource:
Fischer, Stanley. IMF Essays from a Time of Crisis: The International Financial System, Stabilization, and Development. Cambridge, MA: MIT Press, 2004.
Save Citation »Export Citation » Share Citation »
The programs offered by the IMF during the last decade of the 20th century to Latin American and Asian countries and to Russia drew much criticism. In these essays, Fischer defends those programs as “battlefield medicines,” and such prescriptions cover areas such as macroeconomic policy, stabilization, exchange, and inflation vis-à-vis eastern Europe and the EU as well as poverty and development. Relevant for generalists, policymakers, students, and economists.
Find this resource:
Giovanoli, Mario, and Diego Devos, eds. International Monetary and Financial Law: The Global Crisis. New York: Oxford University Press, 2010.
Save Citation »Export Citation » Share Citation »
The first part deals with redesigning financial architecture; the second takes up post-crisis financial regulatory and supervisory issues in the United Kingdom, the EU, and the United States; the third concerns crisis resolution techniques, and the final part addresses money, payments, and central banks. This book’s dynamic and diverse contents and viewpoints will appeal to bankers, finance professionals, and lawyers equally.
Find this resource:
Hagan, Sean. “Enhancing the IMF’s Regulatory Authority.” Journal of International Economic Law 13.3 (2010): 955–968.
DOI: 10.1093/jiel/jgq044Save Citation »Export Citation » Share Citation »
A succinct article in which the author briefly analyzes the IMF’s existing regulatory, financial, and advisory powers in pointing out areas where changes are being contemplated in the aftermath of the financial crisis of 2008. Available online for purchase or by subscription.
Find this resource:
Lastra, Rosa M. Legal Foundations of International Monetary Stability. Oxford: Oxford University Press, 2006.
Save Citation »Export Citation » Share Citation »
Discusses monetary sovereignty, monetary stability, the institutional buildup of supervision and banking crises, reforms in emerging economies, and the operation of the institutions of integration operating under European monetary law. The book is excellent both for students and for experts in monetary law.
Find this resource:
Lowenfeld, Andreas F. International Economic Law. Oxford: Oxford University Press, 2008.
Save Citation »Export Citation » Share Citation »
Deals with monetary law, trade law, and law-related issues in detail, how laws emerged during the later part of the 20th century and how legal issues were addressed under Bretton Woods and GATT (later under WTO) regimes, respectively. The book covers investment law, customary rules, the EU, and the development of the euro and includes competition law, environmental law, arbitration, and topics that interact with the broader paradigm of economic law.
Find this resource:
Lowenfeld, Andreas F. “The International Monetary System: A Look Back over Seven Decades.” Journal of International Economic Law 13.3 (2010): 575–595.
DOI: 10.1093/jiel/jgq023Save Citation »Export Citation » Share Citation »
In-depth analysis and objective discussion of monetary institutions, notably the IMF, from their genesis to their objectives, functions, and development, the changes made and the amendments adopted especially during the 1970s and in the first decade of the 21st century stemming from increased criticism of the performance of institutions. Also the potential areas where IMF needs to focus more have been identified. Available online for purchase or by subscription.
Find this resource:
International Trade Law
Gadbaw 2010 draws an exciting comparison in an article in which the author traces the success of the trading system, which started off as a weaker sister of the finance system over seventy years ago. Because of the existence of the “rule-oriented” system, which was tested in practice, and of a self-enforcing dispute settlement mechanism, which ensured accountability and enforcement, the weaker sister has now become the “tent pole” holding up the system and the other two pillars have become much weaker. The economic structure of international law explains how trade law approaches can be adopted in financial law (Trachtman 2008). James 2011 provides a relatively stronger analysis of the Bretton Woods system, especially of the contexts retrospectively associated with the formation of an international economic order. See also Charnovitz 2010.
Charnovitz, Steve. “Addressing Government Failure through International Financial Law.” Journal of International Economic Law 13.3 (2010): 743–761.
DOI: 10.1093/jiel/jgq024Save Citation »Export Citation » Share Citation »
After exploring the causes of the financial crisis, the author in this comparative study proposes substantive policy changes in examining the mechanisms operating in both the World Trade Organization, which combine hard law and accountability as they apply to governments, including trade sanctions, and in the International Labor Organization (ILO), whose constitution features the oldest rules of international law, in noting most especially its use of the bottom-up approach for reports and annual reviews. Available online for purchase or by subscription.
Find this resource:
Gadbaw, R. Michael. “Systemic Regulation of Global Trade and Finance: A Tale of Two Systems.” Journal of International Economic Law 13.3 (2010): 551–574.
DOI: 10.1093/jiel/jgq031Save Citation »Export Citation » Share Citation »
While Gadbaw attributes the failure of financial law to the absence of an enforcement mechanism, he suggests devising a strategy to introduce such a mechanism into the financial law for global financial and systemic stability by means of an enhanced role for the WTO. He raises very pertinent questions concerning the existing financial regulatory architecture. Available online for purchase or by subscription.
Find this resource:
James, H. “The Multiple Contexts of Bretton Woods.” Oxford Journal: Past and Present 210 (Suppl. 6) (2011): 290–308.
DOI: 10.1093/pastj/gtq051Save Citation »Export Citation » Share Citation »
James provides a good insight into the triggers that instigated the establishment of these institutions ranging from the New Deal of Walter Frank to the Bretton Woods system of Keynes. The author makes frequent references to the writings of Keynes and Robert Skidelsky, and he concludes with the thought that global policymakers today are again looking for a benign multilateralism such as that which saved the world in the 1940s. Available online for purchase or by subscription.
Find this resource:
Trachtman, Joel P. The Economic Structure of International Law. Cambridge, MA: Harvard University Press, 2008.
Save Citation »Export Citation » Share Citation »
Draws a comparison between trade law and financial law and discusses how trade law operates.
Find this resource:
Regional Perspectives
Begg 2009 discusses reform of the EU structure in the aftermath of the global financial crisis from regulatory and supervisory perspectives, particularly the home country control principle that has been in place since the 1980s. Eichengreen and Portes 1997 provides a pithy account of regional financial conditions in Latin America, especially a review of the Mexican crisis of 1994–1995 and the responses to it by the IMF. Eichengreen 2004 provides an overview of Asian markets and how these led to an inefficient allocation of resources. Ahmed 2009 gives a developing economy perspective on the role of subordinate debt policy during the transition to Basel II, highlighting the implications of Basel II for the region. Arner, et al. 2009 affirms that, owing to weak regional institutional and legal structures, the East Asian economies lag behind European and North American economies in financial integration despite the existence of greater economic collaboration within the region. The current crisis provides an incentive for more financial integration within the region.
Ahmed, Md. Kabir. “The Role of an Explicit Subordinated Debt Policy in the Smooth Transition to Basel II: Developing Economy Perspective.” Journal of Banking Regulation 10.3 (2009): 221–233.
DOI: 10.1057/jbr.2009.2Save Citation »Export Citation » Share Citation »
This research article is aimed at bankers and regulatory policymakers. The author affirms the existing capital buffers with the banks in 2007 were not sufficient to support transformation even to Basel II. And now, in the wake of Basel III, he prescribes a role for subordinate debt, especially for developing countries, that can be used while increasing capital limits. Available online for purchase or by subscription.
Find this resource:
Arner, Douglas W., P. Lejot, and Wei Wang. “Assessing East Asian Financial Cooperation and Integration.” Singapore Yearbook of International Law 12 (2009): 1–42.
Save Citation »Export Citation » Share Citation »
Provides a review of the structures of Asian financial integration and of the distinct factors explaining monetary cooperation and capital market developments within the region. The article underlines the need for increased harmonization among East Asian economies with regard to regional standards and patterns of international best practices. Among other future policy options, the author builds a case for creation of an Asian Monetary Fund.
Find this resource:
Begg, Iain. “Regulation and Supervision of Financial Intermediaries in the EU: The Aftermath of the Financial Crisis.” JCMS: Journal of Common Market Studies 47.5 (2009): 1107–1128.
DOI: 10.1111/j.1468-5965.2009.02037.xSave Citation »Export Citation » Share Citation »
Begg points to the changed scenarios after the financial crisis and highlights EU-wide approaches to design a supranational supervisory system as a way forward. He advocates adopting a quasi-federal system as a start, which would tone down the political hurdles in the way of European integration.
Find this resource:
Eichengreen, Barry J. Financial Development in Asia: The Way Forward. Singapore: Institute of Southeast Asian Studies, 2004.
Save Citation »Export Citation » Share Citation »
An account of Asian markets in noting how these are largely based on bank loans rather than on the bonds market. He applies data analysis to support his findings, and suggests the way forward lies in furthering the Chiang Mai initiative for stability and development and strengthening ASEAN+3 to make Asian financial markets more resilient in view of any future financial crises.
Find this resource:
Eichengreen, Barry, and Richard Portes. “Managing Financial Crises in Emerging Markets.” Paper presented at the Federal Reserve Bank of Kansas City’s annual economics conference, Jackson Hole, WY, 28–30 August 1997.
Save Citation »Export Citation » Share Citation »
The authors give a detailed account of policy responses to the Mexican financial crisis and the role played by the IMF, which established an emergency funding mechanism under the recommendation of the G-10 governments. They draw an interesting contrast with the Thailand crisis, which emerged at the end of the Mexican crisis, and they review the role of the IMF in both economies.
Find this resource:
Article
- Act of State Doctrine
- Africa and Intellectual Property Rights for Plant Varietie...
- African Approaches to International Law
- African Commission on Human and Peoples' Rights and the Af...
- Africa’s International Intellectual Property Law Regimes
- Africa’s International Investment Law Regimes
- Agreements, Bilateral and Regional Trade
- Agreements, Multilateral Environmental
- Aliens
- Applicable Law in Investment Agreements
- Archipelagic States
- Arctic Region
- Armed Opposition Groups
- Aut Dedere Aut Judicare
- Balance of Power
- Bandung Conference, The
- Boundaries
- British Mandate of Palestine and International Law, The
- Children's Rights
- China, Judicial Application of International Law in
- China, Law of the Sea in
- Civil Service, International
- Civil-Military Relations
- Codification
- Cold War International Law
- Collective Security
- Command Responsibility
- Common Heritage of Mankind
- Complementarity Principle
- Compliance in International Law
- Conspiracy/Joint Criminal Enterprise
- Constitutional Law, International
- Consular Relations
- Contemporary Catholic Approaches
- Continental Shelf, Idea and Limits of the
- Cooperation in Criminal Matters, Cross-Border
- Countermeasures
- Courts, International
- Crimes against Humanity
- Criminal Law, International
- Cultural Rights
- Cyber Espionage
- Cyber Warfare
- Debt, Sovereign
- Decolonization in International Law
- Democracy
- Development Law, International
- Disarmament in International Law
- Discrimination
- Disputes, Peaceful Settlement of
- Drugs, International Regulation, and Criminal Liability
- Early 19th Century, 1789-1870
- Ecological Restoration and International Law
- Economic Law, International
- Effectiveness and Evolution in Treaty Interpretation
- Enforced Disappearances in International Law
- Enforcement of Human Rights
- Environmental Compliance Mechanisms
- Environmental Institutions, International
- Environmental Law, International
- Estoppel
- European Arrest Warrant
- Exclusive Economic Zone
- Extraterritorial Application of Human Rights Treaties
- Fascism and International Law
- Feminist Approaches to International Law
- Financial Law, International
- Forceful Intervention for Protection of Human Rights in Af...
- Foreign Investment
- Fragmentation
- Freedom of Expression
- French Revolution
- Gender and International Law, Theoretical and Methodologic...
- Gender and International Security
- General Customary Law
- General Principles of Law
- Genocide
- Georgia and International Law
- Grotius, Hugo
- Habeas Corpus
- Hijaz and International Law, The
- History of International Law, 1550–1700
- Hostilities, Direct Participation in
- Human Rights
- Human Rights and Regional Protection, Relativism and Unive...
- Human Rights, European Court of
- Human Rights, Foundations of
- Human Rights Law, History of
- Human Trafficking
- Hybrid International Criminal Tribunals
- Immunities
- Immunity, Sovereign
- in Latin America and the Caribbean, International Legal Pr...
- Indigenous Peoples
- Individual Criminal Responsibility
- Institutional Law
- Inter-American Commission on Human Rights (IACHR) and Inte...
- International and Non-International Armed Conflict, Detent...
- International Committee of the Red Cross
- International Community
- International Court of Justice
- International Criminal Court, The
- International Criminal Law, Complicity in
- International Criminal Tribunal for Rwanda (ICTR)
- International Criminal Tribunal for the Former Yugoslavia ...
- International Fisheries Law
- International Humanitarian Law
- International Humanitarian Law, China and
- International Humanitarian Law, Targeting in
- International Intellectual Property Law, China and
- International Investment Agreements, Fair and Equitable Tr...
- International Investment Arbitration
- International Investment Law, China and
- International Investment Law, Expropriation in
- International Law, Aggression in
- International Law, Amnesty and
- International Law and Economic Development
- International Law, Anthropology and
- International Law, Big Data and
- International Law, Climate Change and
- International Law, Derogations and Reservations in
- International Law, Dispute Settlement in
- International Law, Ecofeminism and
- International Law, Espionage in
- International Law, Hegemony in
- International Law in Cyberspace, China and
- International Law in Greek
- International Law in Italian
- International Law in Northeast Asia
- International Law in Portuguese
- International Law in Turkish
- International Law, Legitimacy in
- International Law, Marxist Approaches to
- International Law, Military Intervention in
- International Law, Money Laundering in
- International Law, Monism and Dualism in
- International Law, Peacekeeping in
- International Law, Proportionality in
- International Law, Reasonableness in
- International Law, Recognition in
- International Law, Self-Determination in
- International Law, State Responsibility in
- International Law, State Succession in
- International Law, the State in
- International Law, The Turkish-Greek Population Exchange a...
- International Law, the Turn to History in
- International Law, The United States and
- International Law, Trade and Development in
- International Law, Unequal Treaties in
- International Law, Use of Force in
- International Legal Personality
- International Regulation of the Internet
- International Relations Study in China, International Law ...
- International Rule of Law, An
- International Territorial Administration
- International Trade and Human Rights
- Intervention, Humanitarian
- Investment Protection Treaties
- Investor-State Conciliation and Mediation
- Iran and International Law
- Iraq War, Britain and the
- Islamic Cooperation, International Law and the Organizatio...
- Islamic International Law
- Islamic Law and Human Rights
- Islands
- Jerusalem
- Jurisdiction
- Jurisprudence (Judicial Law-Making)
- Jus Cogens
- Just War
- Landlocked Countries and the Law of the Sea
- Law of the Sea
- Law of Treaties, The
- Law-Making by Non-State Actors
- League of Nations, The
- Lebanon, Special Tribunal for
- Legal Pluralism
- Legal Status of Military Forces Abroad
- Liability for International Environmental Harm
- Liberation and Resistance Movements
- Mandates in International Law
- Maritime Delimitation
- Martens Clause
- Medieval International Law
- Mens Rea, International Crimes
- Middle East Boundaries and State Formation
- Migration
- Military Necessity
- Military Occupation
- Minorities
- Modes of Participation
- Most-Favored-Nation Clauses
- Multinational Corporations in International Law
- Nationality and Statelessness
- Natural Law
- Neutrality
- New Approaches to International Law
- New Haven School of International Law, The
- Non liquet
- Noninternational Armed Conflict (“Civil War”)
- Nonstate Actors
- Nuclear Non-Proliferation
- Nuremberg Trials
- Organizations, International
- Pacifism in International Law
- Palestine (and the Israel Question)
- Peace Treaties
- Piracy
- Political Science, International Law and
- Positivism
- Private Military and Security Companies
- Protection, Diplomatic
- Public Interest, Human Rights, and Foreign Investment
- Queering International Law
- Rational Choice Theory
- Recognition of Foreign Penal Judgments
- Refugee Law, China and
- Refugees
- Rendition, Extraterritorial Abduction, and Extraordinary R...
- Reparations
- Russian Approaches to International Law
- Sanctions, International
- Sanctions, International
- Secession
- Self-Defense
- Slavery
- Soft Law
- Space Law
- Spanish School of International Law (c. 16th and 17th Cent...
- Sports Law, International
- State of Necessity
- Superior Orders
- Taba Arbitration, The
- Teaching International Law
- Territorial Title
- Terrorism
- The 1948 Arab-Israeli Conflict and International Law
- The Ottoman Empire and International Law
- Theory, Critical International Legal
- Tibet
- Tokyo Trials, The
- Torture
- Transnational Constitutionalism, Africa and
- Transnational Corruption
- Treaty Interpretation
- Ukrainian Approaches
- UN Partition Plan for Palestine and International Law, The
- UN Security Council, Women and the
- Underwater Cultural Heritage
- Unilateral Acts
- United Nations and its Principal Organs, The
- Universal Jurisdiction
- Uti Possidetis Iuris
- Vatican and the Holy See
- Victims’ Rights, International Criminal Law, and Proceedin...
- War Crimes
- Watercourses, International
- Western Sahara
- World Trade Organization Law, China and