European Integration in Finance
How should European financial law best integrate considering the interaction of the relevant legal systems?
- 2014 - 2016
- Matthias Haentjens
Ever since the 1980s, financial law in Europe has been more intensively harmonised. First, this harmonisation was mainly concerned with regulatory law in the specific areas that were considered important for the functioning of the internal market, such as listing requirements and banking regulation. Some the harmonisation instruments were Regulations, but it mainly concerned Directives that had to be implemented in the national laws of the Member States. Supervision also remained largely a national matter.
The last five years, more specifically because of the financial crisis, the ramifications from the fall of Lehman Brothers and the ongoing economic strains in the eurozone have seen a host of new measures to further the European integration of financial law. In an amazingly short time period, financial supervision in the EU has been overhauled, a banking union has been made operational whereby the ECB has taken over supervisory responsibility from the national prudential supervisors of the eurozone and a bank insolvency law has been harmonised. Also, the last decade has seen the European legislator use ever more directly applicable legislative instruments, rather than instruments that must be implemented in the national laws of the Member States. European rules on market abuse, for instance, had first been issued as Directives, but have recently obtained the form of a directly applicable European Regulation. The same is true for rules on (trading on) markets in financial instruments.
The recent harmonisation leap forward in financial matters has not been confined to regulatory law. As stated above, insolvency law has also been touched, but there is more: A first European, direct ground for tort liability of credit rating agencies has been introduced and a proposal for more rules on collateralised finance transactions has been drafted. A proposal for substantive rules on securities custody has been long awaited. Thus, also areas of law that have traditionally been regarded to remain the Member States prerogative, have become the subject of European integration.
The above development poses fundamental questions both on the functioning of the EU and its Member States as one or more (legal) systems, and on the interaction between those systems. This is the focus of this Hazelhoff Centre for Financial Law research programme. With this research programme, the Hazelhoff Centre for Financial Law intends to engage in the academic debate on this development in an inter- and multidisciplinary, as well as a multi-jurisdictional method.
This research project employs a thoroughly inter-disciplinary approach. The project investigates how European financial law should integrate best. This integration, stated above, will impact all areas of law, be it regulatory law, insolvency law, private law or European (institutional) law. Also, the project is not limited to Dutch law. Its scope is extended to supranational (European) law, as well as foreign legal systems, such as English, Spanish and German law. Furthermore, the project is multi-disciplinary. The Europeanization of financial law regards not only legal, but also economic and political perspectives, and the project has the ambition to bring these perspectives together.
The project has an important theoretical dimension, which, at the same time, forms the connection with the larger Leiden Law School research programme Coherent Private Law. The project European Integration in Finance investigates how the various legal systems that make up the European Union should best integrate as regards wishes to address the instances where European (public) law influences national (private) law. For instance, the most recent Credit Rating Agencies Regulation (a European law instrument in the area of public law) has introduced, for the first time, a direct ground for liability of credit rating agencies. However, for the interpretation of many core terms, the relevant provision explicitly refers to the applicable national (private) law. Also, the introduction of a common bank resolution regime has left open many questions regarding where, and under what law (EU, national?) stakeholders should litigate should they wish to challenge resolution decisions or sue for damages in that context.
The project is mainly normative in nature, as it focuses not so much on the description of current rules, but on the rules as they should best be enacted. Consequently, the project is likely to result in practical advice to the national and European legislature.