The Financial Crisis: How Has it Changed Our Thinking About Financial Law

Abstract

This Discussion Paper focuses on the question whether there can be any link between post-FSAP EU financial law and the impact of the financial crisis on EU citizens. In other words : would it be possible that existing rules have facilitated the emergence of the financial crisis and/or the extent of the losses for EU citizens? It is argued that such link cannot be excluded. More specifically, certain rules enshrined in the Capital Adequacy Directive, the Prospectus Directive, UCITS Directives and MiFID may have contributed to the emergence and/or impact of the financial crisis. On that basis it is further argued that it will be key now to identify any such problematic rules and decide what remedial action should be undertaken. As all involved parties – including the European Commission, the Member States or supervisory authorities – have their own interests to protect, it seems recommended that the European Parliament establishes a Financial Crisis Expert Committee that would work independently from any political or business influence. Ideally, such Committee should consist of internationally recognized academia – accountants, legal scholars, economists and behavior psychologists – including a sufficient number of experts who can think “out of the box” and experts with no links to the financial industry.

Keywords: Financial crisis, FSAP, Capital Adequacy Directive, Prospectus Directive, UCITS, MiFID