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london as an independent city state? June 21, 2016

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More amazing possible implications of a Brexit vote.

early draft of my new financial stability paper May 26, 2016

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Financial Stability, Regulation and Politics: Risks, Uncertainties and the International Financial System.

summer writing May 16, 2016

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Over the summer I am working on a new paper on financial stability, which is a development of a paper I wrote for a book edited by Pablo Iglesias-Rodriguez, Anna Triandafyllidou & Ruby Gropas with the title The Financial Crisis and Paradigm Shift: Legal, Economic and Political Perspectives forthcoming July 2016. My chapter is Changing Perceptions of Systemic Risk in Financial Regulation. The new paper is looking at climate change and Brexit as issues of financial stability and I am taking it to Law and Society at the beginning of next month. Meanwhile I also have produced a draft of a paper on Financial Stability, Financial Services and the Single Market .

thinking about financial stability October 12, 2015

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I’d really like to go to this conference, but don’t think I have the time. Meanwhile I am working on a paper with the title Financial Stability: Regulation and Politics which I plan to present at Law and Society next summer.

new paper March 6, 2015

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I have been working on this paper on Changing Perceptions of Systemic Risk in Financial Regulation.

article on interconnectedness May 21, 2014

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In the Texas International Law Journal, Breaking Up is Hard to Do: The Interconnection Problem in Financial Markets and Financial Regulation: A European (Banking) Union Perspective.

problems with the culture of finance: fca sanctions state street uk January 31, 2014

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The UK’s Financial Conduct Authority fined State Street UK £22,885,000 for overcharging customers in its Transitions Management (TM) business. The FCA press release states:

The systemic weaknesses in State Street UK’s business practices and control environment around the UK TM business were so serious that the overcharging only came to light after a client notified staff that it had identified mark-ups on certain trades that had not been agreed. Those responsible then incorrectly claimed both to the client and later to State Street UK’s compliance department that the charging was an inadvertent error, and arranged for a substantial rebate to be paid on that false basis. They deliberately failed to disclose the existence of further mark-ups on other trades conducted as part of the same transition.

The Final Notice says that

State Street UK failed to treat its customers fairly by allowing a culture to develop in the UK TM business which prioritised revenue generation over the interests of customers. As a result, the UK TM business developed and executed a deliberate and targeted strategy to charge substantial mark-ups on certain transitions, in addition to the agreed management fee or commission, that were deliberately not agreed with clients or disclosed to them.

But State Street had held itself out as adhering to the principles in the “T-Charter” a self-regulatory code of practice for participants in the Transitions Management business which provides that participants in this market should only impose charges they agree with their clients. State Street was a “founding signatory” of this Charter.

conflict minerals in the news November 15, 2013

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The 6th ICGLR-OECD-UN GoE Forum on Responsible Mineral Supply Chains has been meeting in Rwanda. Meanwhile, it seems that there is some uncertainty about how the EU will be regulating conflict minerals. And the DC Circuit will hear the National Association of Manufacturers’ appeal of the rejection of its challenge to the US rules (here is a link to NAM’s latest brief in the case filed this week).

judge rakoff on the downside of corporate deferred prosecution agreements November 13, 2013

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There’s a lot more than this in the article (at zerohedge) which suggests that the government’s role in creating the conditions which propagated the financial crisis helps to explain why we haven’t been seeing criminal prosecutions of senior financiers. But part of the story Judge Rakoff tells is of a prosecutorial environment which focused more on corporate than on individual responsibility:

if your priority is prosecuting the company…Early in the investigation, you invite in counsel to the company and explain to him or her why you suspect fraud. He or she responds by assuring you that the company wants to cooperate and do the right thing, and to that end the company has hired a former Assistant U.S. Attorney, now a partner at a respected law firm, to do an internal investigation. The company’s counsel asks you to defer your investigation until the company’s own internal investigation is completed, on the condition that the company will share its results with you. In order to save time and resources, you agree. Six months later the company’s counsel returns, with a detailed report showing that mistakes were made but that the company is now intent on correcting them. You and the company then agree that the company will enter into a deferred prosecution agreement that couples some immediate fines with the imposition of expensive but internal prophylactic measures. For all practical purposes the case is now over. You are happy because you believe that you have helped prevent future crimes; the company is happy because it has avoided a devastating indictment; and perhaps the happiest of all are the executives, or former executives, who actually committed the underlying misconduct, for they are left untouched…. Just going after the company is ..both technically and morally suspect. It is technically suspect because, under the law, you should not indict or threaten to indict a company unless you can prove beyond a reasonable doubt that some managerial agent of the company committed the alleged crime; and if you can prove that, why not indict the manager? And from a moral standpoint, punishing a company and its many innocent employees and shareholders for the crimes committed by some unprosecuted individuals seems contrary to elementary notions of moral responsibility.

Meanwhile, the SEC just announced its first deferred prosecution agreement with an individual. And, as Brandon Garrett and David Zaring note here, the UK has adopted a regime for deferred prosecution agreements which differs in some important respects from the US approach:

Britain’s impending adoption of the agreements, on the other hand, exemplifies the cautious embrace offered by good administrative law.
Britain’s proposed program comes with a code governing its use, and a requirement that a court conclude that the agreement is both “in the interests of justice” and “fair, reasonable, and proportionate.” Moreover, the proposal itself has been opened for comment from the public.

rbs libor settlements February 6, 2013

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The CFTC announced that Royal Bank of Scotland plc and RBS Securities Japan Limited will pay $325 million to settle charges of manipulation, attempted manipulation and false reporting of yen and Swiss franc LIBOR (see order here). The UK FSA announced it had fined Royal Bank of Scotland plc (RBS) £87.5 million for misconduct relating to the London Interbank Offered Rate (LIBOR) (Final Notice here).