Fiduciary Society Unleashed: The Road Ahead for the Financial Sector

38 Pages Posted: 5 Oct 2014 Last revised: 9 Dec 2014

See all articles by Edward J. Waitzer

Edward J. Waitzer

York University - Osgoode Hall Law School; York University - Schulich School of Business; Stikeman Elliott LLP

Douglas Sarro

University of Toronto, Faculty of Law

Date Written: 2014

Abstract

Informational asymmetries, misaligned incentives, and artificially elongated chains of intermediation have created a disconnect between the financial sector and the “real economy” that is detrimental to the public interest. Courts and regulators are increasingly intervening to break the cycle. We argue that fiduciary law offers a conceptual framework both for understanding and responding to this trend, and that the financial sector, rather than waiting for this trend to develop and reacting to new rules in a piecemeal way, should be proactive and try to shape the way in which this trend develops. We describe some elements of what such an approach might look like, and consider how regulators and political institutions can encourage financial institutions to adopt this approach, and in so doing support a broader transition to a more sustainable economy.

Keywords: Fiduciary, Financial Sector Reform, Governance, Intergenerational Equity, Institutional Investors, Pension Funds, Prudent Person Standard

JEL Classification: G20, G30, K20

Suggested Citation

Waitzer, Edward J. and Sarro, Douglas, Fiduciary Society Unleashed: The Road Ahead for the Financial Sector (2014). Business Lawyer, Vol. 69, No. 4, pp. 1081-1116, August 2014, Osgoode Legal Studies Research Paper No. 76/2014, Available at SSRN: https://ssrn.com/abstract=2504498

Edward J. Waitzer (Contact Author)

York University - Osgoode Hall Law School ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
416 869 5587 (Phone)

York University - Schulich School of Business

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

Stikeman Elliott LLP

5300 Commerce Court West
199 Bay Street
Toronto, ON M5L1B9
Canada

Douglas Sarro

University of Toronto, Faculty of Law ( email )

Toronto
Canada

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