The Impact of Financial Crisis on Regulation of Private Financing


The Impact of the Financial Crisis on Regulation of Private Financing

Professors Giulio Vesperini and Edoardo Chiti
University of La Tuscia

Research Project Co-Financed by the Italian Ministry of Education, University and Research

1. Objective

Following the development and spread of the global financial crisis, the system in charge of the regulation of private finance has been subject to a continuous succession of innovations, some of which have already been brought to completion, whereas others are currently underway or are soon going to be introduced.

These innovations relate to all sectors of private finance, ranging from rules on regulating activities and procedures, to architectures and forms of supervision. The EU legislator has revisited the framework concerning the activities and subjects seen as ‘traditional’ (such as banking, insurance, dealing in real estate securities). It has dealt with complicated phenomena, together with ‘new’ tools and subjects (such as rating agencies, financial derivatives, shadow banking, crowd-funding etc.). It has reshaped the institutional framework for supervision and prudential control.

The research project, led by Professors Giulio Vesperini and Edoardo Chiti, aims at making sense of the current transformations of the European regulation of private finance. We want to focus attention on the actors and instruments of the new regulatory framework, on its overall rationales, on the legal discourses on which it rests, on the effects of the structures and processes of EU administrative law. We invite various types of papers and approaches. Papers can focus on specific legal issues raised by the new regulatory framework. They may also attempt, though, at capturing the overall dynamics of the current developments, as well as at positioning them within the broader context of the transformation of the EU polity.

Our interest covers the following areas and themes:

– credit rating agencies and the use of ratings;
– the new Capital Requirements Directive (CRD IV);
– the development of the disciplines on transparency and consumer protection within the framework of financial regulation;
– the regulation of financial derivatives and market structures;
– the structure and functions the new ESFS authorities;
– the emerging banking union;
– the banking recovery system.

Contributions are recommended to address the following questions, among others:

– what phenomena have led to the expanded scope of regulation? Are the new regulatory measures efficient and suitable in order to prevent risks posed by the interdependencies which have been revealed by the crisis (e.g. in the banking sector)? Why is a supranational intervention justified in these areas, and what are coordination problems that arise with national reference standards? What effects does the proliferation of supranational regulation produce both on the national market and administrative structures, as well as on the responsibilities of internal authorities? What weaknesses do emerge from this set-up?

– To what extent are these interventions aimed at the realization of those regulation objectives concerning the single market? Are there other purposes that are pursued, even if “covered” by the key goal of creating and guaranteeing the proper functioning of the single market itself? If so, do these purposes highlight a new paradigm of the regulation that, among other things, gradually tends to take spaces of intervention away from domestic legislatures? Can the pursuit of the various purposes of regulation be traced back to a single plan? Can the several and main sought-after aims, such as markets and operators stability, consumer protection, development of the single market and economic growth, coexist with each other, thus revealing the existence of an actual common paradigm?

– What role seems to rest with the EU legislator? What are the effects that will affect the principle of subsidiarity? What methods were adopted for the regulatory decision-making? What role have the involved institutions played in this process? If there has been a change in the balances among these entities, together with an evolution of the adopted methods, what factors proved to be crucial for this transformation? What sources does EU law has used, and still does, to step in the field of private-financing regulation? What relationships
arise between directives and regulations, and what role is played by the Commission? Is the dialogue with the national authorities moving on the tracks laid down by the Treaties? What parts have national authorities and actors played in this scenario (e.g. Constitutional courts)? What are the relationships among the overseers? Is there any risk of overlapping tasks and functions? How is the dialogue with private actors established?

– How are EU rules affected by different global and supranational sources? What channels does EU go through in order to play an active role in making these rules and how has the interaction between these sources and the EU act of enactment evolved after the financial crisis? Are there linkage mechanisms with authorities outside the European Union? What channels do they move through and what part do those authorities play as far as global regulation is concerned? To what extent does this role lead to a participation of the European Union to the overall process of the production rules and standards? Is it possible to assume they will play a greater role at the global level?

– How are the paradigms of both supervision and banking supervision changing from a structural point of view? What kind of relationships will be established among ESAs once the banking union is achieved? What problems can be determined by conferring delicate banking supervisory tasks back on the ECB? What effects could be determined on the current institutional balance? What kind of effects can arise on other responsibilities, assigned by the Treaties and the sources of the law? According to what parameters is supervision organized? What are the objectives to be pursued? What pattern has the division of responsibilities among the different authorities followed? Is it a form which complies with the supervisory model adopted in EU countries, in particular in Italy, or is there any difference that may create inconsistencies and/or coordination problems at the national level?

2. Call for papers – submission process and selection

Submissions from both junior scholars (including PhD students and advanced law students, as well as practitioners and new faculty) and senior scholars are invited on the themes outlined above.

Abstracts should be at least 150 words, but longer and more fully-developed abstracts up to 1,000 words are welcome and encouraged where possible. Abstracts should be sent (in .doc or .docx format) to by January 8, 2014. Abstracts must include a statement of the issue area of the paper, as well as an indication of the major arguments to be made, a proposed title, and postal, email and telephone contacts for the author.

A selection panel will consider all abstracts received by the submission deadline, and notify applicants of paper acceptance by January 31, 2014. The submission date for an advanced draft of accepted papers is June 8, 2014. The scientific panel reserves the possibility to organize a Seminar at the University of La Tuscia, Viterbo, to discuss with the authors the advanced drafts of their papers. The final version of the paper must be no longer than 8,000 words (footnotes included) and must be sent by October 8, 2014 (in .doc or .docx format) to Only a very limited number of promising papers can be accepted.

The project is expected to lead to the publication of the selected papers. The scientific panel reserves its right to choose the form of final publication.