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spring 2019 archive

Week 15: April 22-25 On Monday I plan to finish discussing some of the Brexit material and do some wrapping up of the class. I will also bring the evaluation forms so class will finish around 12.05pm.

There will be a review session on Thursday April 25 from 3-5pm in F200. This is primarily for those who are taking the final exam (although all are welcome). I will plan to have an exam in the same format as the 2014 exam I put on the materials page. You can see that in 2014 I was also concerned with the gatekeepers issue, and also bear in mind that from the beginning of the semester I identified the 5 topics set out above as the focus of the class. We did spend more time on some of these issues than on others. But you will have a choice about what questions to answer.

Week 14: April 15-19 On Monday we will begin with Loan Market Association, Loan Syndications and Trading Association & Asia Pacific Loan Market Association, Sustainability Linked Loan Principles (Mar. 2019) (Press Release); Banking on Climate Change: Fossil Fuel Finance Report Card 2019 also Caroline Bradley, Climate Change and Brexit as Financial Stability Risks (2017). My paper looks at financial stability and uses climate change and Brexit as financial stability issues. The situation has evolved a bit since the date of this draft, but the core issue of dealing with financial stability issues arising outside the financial system and which also involve politics is still a live one.

And here are some suggested Brexit materials beginning with some short documents on the extension of the deadline from April 12 to October 31:

European Council decision taken in agreement with the United Kingdom, extending the period under Article 50 TEU (Apr. 10, 2019); European Council (Art. 50) conclusions (Apr. 10, 2019); EU Commission Communication, Addressing the impact of a withdrawal of the United Kingdom from the Union without an agreement: the Union’s coordinated approach, COM (2019) 195 final (Apr. 10, 2019); Joint Committee of European Supervisory Authorities, Report on Risks and Vulnerabilities in the EU Financial System (Spring 2019) .

Then, for Wednesday: François Villeroy de Galhau, Governor of the Bank of France, How to develop a “financial Eurosystem” post-Brexit (remarks at the Eurofi High Level Seminar 2019, Bucharest, 5 April 2019); Bradley, Forking Law (2019 draft); The Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019, SI 2019 No. 541; ESMA Statement, Impact of Brexit on the trading obligation for shares (Article 23 of MiFIR) (Mar. 19, 2019)

April 15: I mentioned the OECD Financing Climate Futures report today, which you can access here.

Week 13: April 8-12
We will not be meeting for class this week. If you are writing a paper for me and have not sent me your draft yet, please do so as soon as possible. If you have sent me your draft I will send you comments as soon as I can (if I haven’t yet done so). I will be available next week after 3.30 each day (except not at 5.30 Wednesday) to meet with you to discuss papers or questions you have about the course. If you would like to meet with me please email me to schedule an appointment.

April 12 – next Friday – is the day the UK crashes out of the EU unless there is an extension of the period or the UK figures out a solution the EU 27 will agree to. The week after next we will begin with some of the issues we didn’t really address this week . So we will begin with Loan Market Association, Loan Syndications and Trading Association & Asia Pacific Loan Market Association, Sustainability Linked Loan Principles (Mar. 2019) (Press Release); Banking on Climate Change: Fossil Fuel Finance Report Card 2019 . And Caroline Bradley, Climate Change and Brexit as Financial Stability Risks (2017). My paper looks at financial stability and uses climate change and Brexit as financial stability issues. The situation has evolved a bit since the date of this draft, but the core issue of dealing with financial stability issues arising outside the financial system and which also involve politics is still a live one.

I will add some materials relating to Brexit later.

Week 12: April 1-5. On Monday we will begin with IMF, The Bali Fintech Agenda (Oct. 2018) and then move on to issues relating to climate change.

Climate change involves a number of different issues with respect to finance which have transnational or international aspects. We will focus on four different topics: (1) the idea of sustainable finance; (2) the question of how issuers of securities should take account of climate related issues in making securities disclosures; (3) climate finance: principles financial institutions adopt about how they will apply lending standards etc to take account of climate related issues, and green bonds; (4) climate change and financial stability.

For Monday I am going to ask you to read: on sustainable finance generally: EU Commission Communication, Action Plan: Financing Sustainable Growth, COM(2018) 97 final (Mar. 8, 2018) .

Also for Monday, on securities related issues: William Hinman, Director, Division of Corporation Finance, SEC, Applying a Principles-Based Approach to Disclosing Complex, Uncertain and Evolving Risks, Remarks at the 18th Annual Institute on Securities Regulation in Europe, London, England (Mar. 15, 2019); Petition to the SEC for a Rulemaking on Environmental, Social, and Governance (ESG) Disclosure by Professor Cynthia Williams, Osgoode Hall Law School (Oct. 1, 2018) ; Petition to the SEC for Rulemaking on Biomass and Climate Disclosures (Feb. 27, 2019); Ramirez v Exxon Mobil Corporation (ND Tex. 2018). I think this is more material than we can realistically cover on Monday, but the securities material fits together, I think.

For Wednesday please read Loan Market Association, Loan Syndications and Trading Association & Asia Pacific Loan Market Association, Sustainability Linked Loan Principles (Mar. 2019) (Press Release); Banking on Climate Change: Fossil Fuel Finance Report Card 2019 . Also Caroline Bradley, Climate Change and Brexit as Financial Stability Risks (2017).

Week 11: March 25-29 This week we will examine some issues relating to Fintech, which is a large subject raising issues to do with the implications of technological change for financial services, financial markets and financial regulation. How do and should policy-makers deal with technological change (welcome it or adopt a cautious approach)? A way of navigating this choice is the setting up of Regulatory Sandboxes to permit innovation that regulators can monitor. There are some other issues here we could discuss. For example, governments often suggest they compete with each other to attract financial business, or to become a significant financial center. But whereas there is some of this with respect to FinTech (e.g. Cryptovalley) there are also FinTech Bridges where jurisdictions agree to work together.

On the subject of transnational regulatory approaches to financial regulation we have noticed some different techniques: treaties establishing binding legal rules, soft law harmonization (e.g. the Basel Committee) combined with peer reviews to encourage adoption of the standards, and with respect to remuneration, policy learning and sharing of best (or better) practices. FinTech is another area where regulators are looking at what regulators in other jurisdictions are doing.

So, here are some materials to allow us to explore these issues:

For Monday, an introduction and some material on ICOs:

Caroline Bradley, Financial Innovation and Financial Regulation: the Disruptive Promises and Perils of Technological Change (June 2018 version)

Australian Government, The Treasury, Initial Coin Offerings Issues Paper (Jan. 2019)

OECD, Initial Coin Offerings (ICOs) for SME Financing (Jan. 2019)

For Wednesday

Financial Action Task Force, Public Statement – Mitigating Risks from Virtual Assets (Feb 2019)

ESMA, EBA, EIOPA, FinTech: Regulatory Sandboxes and Innovation Hubs (Jan. 2019)

IMF, The Bali Fintech Agenda (Oct. 2018) (looking at how FinTech may promote financial inclusion)

Week 10: March 18-22: We will focus on International Finance Materials Chapter 5: Compliance and Financial Regulation. Please read this document for Monday, and for Wednesday please also read Australian Prudential Regulation Authority, Remuneration Practices at Large Financial Institutions (Apr. 2018) .

I added my Spring 2014 exam to the materials page. Looking at the exam, I don’t think question 1 works too well this semester, at least so far. But the other questions (or questions quite like them) would work now.   2014 was much closer to the last financial crisis than we are now. But we have looked at more material this semester on the gatekeeper question than we did in 2014. And I still think there are important questions there. We have also spent quite a bit of time on issues involving sovereign debt this semester (which was also the case in 2014).  But in 2014 by this stage of the semester I had focused more than we have on the developing thinking about bank regulation. After the break we will be spending some time on fintech and climate change issues which are new.  I think it makes sense to ask one question about each major component of the course.

Overall, my objective in this class is a bit different from that for some other classes. We are focusing on some of the issues which arise in international finance, and looking at how law deals with those issues. But the issues themselves are quite different – there are issues of the application of contract law  (NML Capital, Libyan Arab Foreign Bank),  and then there are issues of how laws might be better constructed (e.g. Transatlantic Misalignment).

Week 9: March 11-15: Spring Break. I hope you all have a good break.

Week 8: March 4-8 For next week the reading materials are: 

Monday: International Finance Materials Chapter 4: Sanctions (pages 25-36), International Finance Materials Chapter 4a: Sanctions- Venezuela Wednesday: Tom Keatinge, Emil Dall, Aniseh Bassiri Tabrizi and Sarah Lain, Transatlantic (Mis)alignment: Challenges to US-EU Sanctions Design and Implementation, Royal United Services Institute for Defence and Security Studies Occasional Paper (Jul. 2017).

If you are writing a paper for the class I would like you to inform me of your progress next week, please.

Week 7: February 25-March 1: On Monday we will focus on financial market infrastructures. Please read  Clearing House Interbank Payments System (“CHIPS®”) Public Disclosure of Legal, Governance, Risk Management, and Operating Framework June 2018  and The Bank of England’s Supervision of Financial Market Infrastructures — Annual Report (For the period 21 February 2018 — 14 February 2019. On this CHIPS web page there is an orange “how it works” link that provides a useful diagram of the system. 

I filed the first document in the materials page under issues in transnational financial regulation, although CHIPS is a US domestic payments system. But it is regulated in a way that is consistent with the principles for FMIs set out at the end of Chapter 3a of the materials.

On Wednesday we will focus on sanctions: please read International Finance Materials Chapter 4: Sanctions. There are a number of issues going on here and this material will likely take more than one class to digest. And I think it would make sense to focus after this on the details of some of the recent US sanctions measures (although they are really complicated).

Week 6: February 18-22 On Monday we will focus on the last section of International Finance Materials Chapter 3: Sovereign Debt relating to the idea of a Sovereign Debt Restructuring Mechanism and Collective Action Clauses and we will also look at  Law Debenture Trust v Ukraine [2018] EWCA Civ 2026 (Court of Appeal, September 2018). As this blog post notes, the case addresses issues relating to odious debt, but also an issue about the extent to which courts should be involved in adjudicating issues which could be seen as essentially political issues.

For Wednesday please read International Finance Materials Chapter3a: Eurodollars and The Bank of England’s Supervision of Financial Market Infrastructures — Annual Report (For the period 21 February 2018 — 14 February 2019.

Week 5: February 11-15 We will be working through International Finance Materials Chapter 3: Sovereign Debt this week, starting with  Trust v Love Funding.  For Monday please read to page 86, and for Wednesday to the end of the Chapter.

Afterwards we will focus on Law Debenture Trust v Ukraine [2018] EWCA Civ 2026 (Court of Appeal, September 2018), but that will probably be the following week.

With respect to sovereign immunity,  it is worth noticing that Congress is considering enacting a No Oil Producing and Exporting Cartels (NOPEC) Act to remove immunity from OPEC countries with respect to oil price fixing.

Week 4: February 4-8: This week we will begin to look at International Finance Materials Chapter 3: Sovereign Debt.

For Monday please read to page 45, and for Wednesday please read to page 74.  We will still be working on this material the following week. And for that week (week 5) I am also going to ask you to read Law Debenture Trust v Ukraine [2018] EWCA Civ 2026 (Court of Appeal, September 2018).

I know I said I would provide some material on initial coin offerings addressing the Morrison v NAB issues there.  I will plan to talk about that for some of Monday’s class in addition to going over some of the material from the last materials packet that we did not get to on Wednesday.

Week 3: January 28- February 1:  We’re back to 2 classes this week. And we will be focusing on International Finance Materials Chapter 2: Transnational Investment in Securities . I am assigning pages 1-50 for Monday (although we likely will not get through all of this material on Monday) and the rest of the chapter for Wednesday.

Week 2: January 21-25: This week we will finish International Finance Materials Chapter 1: Introduction.

Over the weekend I will put up the next section of materials (which we will be looking at the following week).

Week 1: January 14-18
For the first class on Monday January 14, please read the first 26 pages of International Finance Materials Chapter 1: Introduction.

For class on Wednesday January 16 please read to page 49.

As we consider the course materials we will also think about some current developments relating to international finance. For example, at the beginning of 2019 there are some questions about financial stability (stock markets have encountered recent volatility; commentators raise questions about the eurozone; Brexit) and about the future direction of international financial institutions (Jim Yong Kim announced he was stepping down from leadership of the World Bank).

Here are the Class Policies.