International Law in Financial Regulation and Monetary Affairs

470 Pages·2012·2.12 MB·English

by  John H. Jackson

INTERNATIONAL ECONOMIC LAW SERIES
GeneralEditor:JOHN H. JACKSON
International Law in Financial
Regulation and Monetary Affairs
This page intentionally left blank
International Law
in Financial Regulation
and Monetary Affairs
Editedby
THOMAS COTTIER,
JOHN H. JACKSON,
and
ROSA M. LASTRA
1
3
GreatClarendonStreet,Oxford,OX26DP,
UnitedKingdom
OxfordUniversityPressisadepartmentoftheUniversityofOxford.
ItfurtherstheUniversity’sobjectiveofexcellenceinresearch,scholarship,
andeducationbypublishingworldwide.Oxfordisaregisteredtrademarkof
OxfordUniversityPressintheUKandincertainothercountries
#Theseveralcontributors,2012
Themoralrightsoftheauthorhavebeenasserted
FirstEditionpublished2012
Impression:1
Allrightsreserved.Nopartofthispublicationmaybereproduced,storedin
aretrievalsystem,ortransmitted,inanyformorbyanymeans,withoutthe
priorpermissioninwritingofOxfordUniversityPress,orasexpresslypermitted
bylaw,bylicenceorundertermsagreedwiththeappropriatereprographics
rightsorganization.Enquiriesconcerningreproductionoutsidethescopeofthe
aboveshouldbesenttotheRightsDepartment,OxfordUniversityPress,atthe
addressabove
Youmustnotcirculatethisworkinanyotherform
andyoumustimposethissameconditiononanyacquirer
CrowncopyrightmaterialisreproducedunderClassLicence
NumberC01P0000148withthepermissionofOPSI
andtheQueen’sPrinterforScotland
BritishLibraryCataloguinginPublicationData
Dataavailable
ISBN 978–0–19–966819–9
PrintedinGreatBritainby
CPIGroup(UK)Ltd,Crydon,CR04YY
LinkstothirdpartywebsitesareprovidedbyOxfordingoodfaithand
forinformationonly.Oxforddisclaimsanyresponsibilityforthematerials
containedinanythirdpartywebsitereferencedinthiswork.
’
General Editor s Preface
Theglobalfinancialcrisishasprofoundlyaffectedthelivesandlifestylesofagreat
number of people. This has led individuals in all sections of society—including
academia,government,andbusiness—toinquireintothecausesandprogressionof
the crisis. It has also prompted reflection on potential reforms that could prevent
suchacatastrophefromhappeninginthefuture.
Motivated by these concerns and mindful of the complexity (as well as the
perplexity) of the activities in international financial markets, a number of the
JournalofInternationalEconomicLaw’seditorsdiscussedwhethertheJournalcould
makeapertinentcontributiontotherelevantpolicydebates.
As the Editor-in-Chief of the Journal, I was thrilled when Professors Thomas
Cottier and Rosa Lastra agreed to my request to take on the formidable task of
SpecialEditorsforthisproject.ThomasandRosaacceptedtheprincipalresponsi-
bility for constructing an appropriate outline of topics as well as selecting and
inviting authors to participate. With a few necessary exceptions, the authors
discussed these drafts at a fascinating conference held at Georgetown University’s
CenterforTransnationalLegalStudiesinLondonon21May2010.ASpecialIssue
of the Journal, published in September 2010, entirely devoted to the issues
implicatedinthecrisis,wastheresultofthesediscussions.
Following the publication of the Special Issue it was agreed with Oxford
University Press that it would be beneficial to release an updated volume that
tookintoaccountsomeoftherecentlegaldevelopmentsininternationalfinancial
regulation and monetary policy. This book is the result with each chapter newly
updated, where appropriate, to take into account relevant developments while
ensuring that the fundamental concepts raised by each contributor remain intact.
Inadditiontheamendedintroductionandadditionalconclusionhighlightsomeof
the major events that have occurred in the field since the Special Issue was first
published.
Whiletheeditorsdecidedthattheycouldmakeaworthycontributiontocurrent
discourses,theywerecautiousnottoventureoutsideofthemissionandexpertiseof
theJournal.Thereisanever-increasingamountofpublishedmaterialdealingwith
allfacetsofthecrisis.Theeditorsconsciouslydecidedthatthecontributionswould
focus (insofar as feasible)on those aspects ofthe crisis most suited toanalysis and
studyby(international)legalscholars.AsarevisionoftheoriginalSpecialIssuethis
volume follows suit and is directed at regulation and how regulatory activity and
reform might best be approached. While other major policy problems—such as
recession, stimulus, and bail outs—might be better examined by experts from
disciplines other than law, the editors also conceded that those issues could not
alwaysbedetachedfromthecomplexandinterrelated‘lawyers’agenda’.
vi GeneralEditor’sPreface
Therolethatinternationallawplaysinfinancialregulationandmonetarypolicy
remains at the forefront of governments and international bodies policy agendas
and will continue to do so for the foreseeable future. The contributions in this
volumewillserveasaplatformforfutureanalysisandwillremainaguideforpolicy
makers,professionals,andacademicslookingtotacklethecomplexissuesdiscussed.
JohnH.Jackson
Contents
ListofAbbreviations x
ListofContributors xiii
Introduction 1
ThomasCottierandRosaM.Lastra
I. THE CRISIS OF 2007–2009: NATURE, CAUSES,
AND REACTIONS
1. TheCrisisof2007–09:Nature,Causes,andReactions 9
RosaM.LastraandGeoffreyWood
II. ARCHITECTURE AND CONCEPTUAL ISSUES
2. SystemicRegulationofGlobalTradeandFinance:ATaleof
TwoSystems 31
R.MichaelGadbaw
3. TheInternationalMonetarySystem:ALookBackOver
SevenDecades 52
AndreasF.Lowenfeld
4. TowardsaNewArchitectureforFinancialStability:SevenPrinciples 72
LuisGaricanoandRosaM.Lastra
5. WhySoftLawDominatesInternationalFinance—andnotTrade 95
ChrisBrummer
6. The‘SantiagoPrinciples’forSovereignWealthFunds:ACase
StudyonInternationalFinancialStandard-SettingProcesses 114
JosephJ.Norton
III. FINANCIAL MARKET REGULATION
7. TheRoleandProspectsofInternationalLawinFinancial
RegulationandSupervision 133
ChristianTietjeandMatthiasLehmann
8. MultilayeredGovernanceinInternationalFinancialRegulation
andSupervision 151
RolfH.Weber
viii Contents
9. BorderProblems 171
CharlesA.E.GoodhartandRosaM.Lastra
10. TheInternationalLawofFinancialCrisis:Spillovers,Subsidiarity,
FragmentationandCooperation 183
JoelP.Trachtman
11. AddressingGovernmentFailurethroughInternational
FinancialLaw 205
SteveCharnovitz
12. ReducingSystemicRiskthroughtheReformofCapitalRegulation 222
HalS.Scott
13. TheRoleofTransparencyinFinancialRegulation 237
ChristineKaufmannandRolfH.Weber
14. GlobalSecuritiesRegulationaftertheFinancialCrisis 254
DonaldC.Langevoort
IV. TRADE, COMPETITION, AND TAX-
RELATED ASPECTS
15. WhatRoleforNon-DiscriminationandPrudentialStandardsin
InternationalFinancialLaw? 271
ThomasCottierandMarkusKrajewski
16. FinancialServicesTradeAftertheCrisis:PolicyandLegal
Conjectures 288
PanagiotisDelimatsisandPierreSauvé
17. WTOSubsidiesDisciplineDuringandAftertheCrisis 307
GaryN.HorlickandPeggyA.Clarke
18. TheRoleofCompetitionandStateAidPolicyinFinancial
andMonetaryLaw 321
PhilipMarsdenandIoannisKokkoris
19. InternationalRegulatoryReformandFinancialTaxes 337
KernAlexander
V. MONETARY REGULATION
20. TheRoleofInternationalLawinMonetaryAffairs 357
ErnstBaltenspergerandThomasCottier
21. FinancialStabilityandMonetaryPolicy:NeedforInternational
Surveillance 382
GaryHufbauerandDanielDanxiaXie
22. EnhancingtheIMF’sRegulatoryAuthority 396
SeanHagan
Contents ix
VI. CONCLUSIONS
Conclusions 411
ThomasCottierandRosaM.Lastra
Bibliography 427
Index 439