Finance and Law ― Twins in Trouble

With the financial crisis in 2007, which turned into an economic crisis soon afterwards, it was obvious that public law could not prevent the genesis of this crisis, even though it has adequate instruments to make a reoccurrence of such a crisis unlikely. Financial law, tax law, and even aspects of criminal law are designed to regulate the behavior of financial institutions and other corporations. Since public law was unable to avoid the 2007 crisis, there can only be one conclusion: its instruments did not work properly or, worse, were badly designed or applied. Since 2007, a lot has been done from a financial, tax, or criminal law point of view, confirming this finding. Regulation has thus been at the center of the financial and legal debate, but a real understanding of the lessons of the crisis also requires an account to be taken of private law. Is there a possible connection between private law and the outbreak of a financial and economic crisis? In the current design, did private law mechanisms or instruments contribute to the crisis? Does private law provide mechanisms that might have prevented the genesis of a financial crisis? If so, why did these mechanisms fail to do so? And, is there a need for new or modified instruments to improve the impact of private law on events that may lead to a new crisis? This rigorous, enlightening, and thought-provoking book makes it clear that private law and the possibility of a financial and economic crisis are strongly intertwined. It shows that private law provides as many useful institutions, mechanisms, and instruments against the emergence of such a crisis as public law does. [Subject: Private Law, Finance Law, Law and Economics]