Relationships sometimes get stuck in a pattern. Sometimes those patterns are bad for both parties. Since the recent global financial crisis, public opinion and the financial services industry have been locked in a circle of recrimination and defensiveness. It is leading nobody anywhere. Both parties need to break free of the dynamic. It may be a big task to find a way to break a decade-old stalemate, but our lead article in this issue is ambitious enough to attempt to do just that. Richard Samuel’s article, ‘The FCA has listened. Banks, now it’s in your interest to listen too’, invites the markets to view continued pressure for affordable access to justice from their customers as an opportunity, not a threat. The author reminds us of a couple of examples of the industry making easy dispute resolution work as a matter of self-interest—with resulting commercial advantage arguably greater for the industry than for the customer. He challenges the markets to apply a successful strategy of the past to today’s environment and on a bigger scale. In short, the argument goes that reducing the cost of competent and authoritative dispute resolution for the customer attracts customers by assuaging a key concern, strengthens demand for the product accordingly and fosters international markets for the industry. And for the industry, it should also produce supply side efficiencies by clarifying the meaning of regulation along the way. Richard’s latest essay is the third and final part of his much-followed trilogy. His CMLJ writings to date have attracted approximately 2,500 full-text downloads and a related blog has inspired nearly 1,000 page views. More to the point, his proposal, developed in the pages of this Journal, has attracted support from the UK All-Party Parliamentary Group on Fair Business Banking. At the time of writing this note, that proposal was scheduled for a second Parliamentary debate in the week ahead, and Financial Times city editor Jonathan Ford,1 noting Richard’s recommendation for a low-cost independent tribunal system for bank customer financial product complaints, concludes that the alternative of referrals to the Financial Ombudsman Service on the grounds that there is not parliamentary time for that recommendation would be ‘a mistake’. In making the case for a new tribunal better positioned to meet the needs of the SMEs and other customer businesses, the Samuel article accepts that the ‘wholesale’ financial markets may already be well-served today, at least in the English common law courts when ‘both parties to a dispute have deep pockets’. We asked one of our Editorial Board members, Massimiliano Danusso, for his views on that proposition by reference to a series of derivatives disputes involving Italian counterparties, and giving rise to public as well as civil law allegations, heard by both Italian and English court judges—cases in which Mr Danusso has had direct involvement or that he has otherwise followed closely. His conclusion (in the article that follows Richard’s in this issue) is that indeed in these more expensive cases, the English common law courts have acquitted themselves well (although not necessarily at first instance in one case when considering the possible application of mandatory rules of Italian law) but that in proceedings in Italian courts post-crisis concerns about the national economy may have clouded thinking about the value that flows from the stability of fully agreed contractual relationships and the rule of law itself. In the two articles that follow next in this issue, we turn from the role of courts as hospitals where one or both parties turn when injured to the preventive medicine that regulation potentially represents and the relevance of FinTech in this regard. The first of these, by Professors Bromberg, Godwin and Ramsay at the University of Melbourne, admits the challenge and risks of FinTech for domestic regulation but argues that the use of technology in financial services offers regulators an opportunity as well—in particular, as a potential catalyst for enhanced cross-border regulatory cooperation. The second gives us a case study of recent developments in FinTech regulation in China, where Internet finance has thrived in recent years. The author, Chuanman You, concludes that China’s regulatory approaches and models responding to expansive use of crowdfunding to facilitate the peer-to-peer lending business warrant further consideration and hold out promise for the more global regulatory agenda in this area. And finally, we look at exit consents in debt restructurings. Widely used and potentially effective in out-of-court debt restructurings, this technique can be and has been subject to legal challenge. Benjamin Liu discusses, in light of recent case decisions, the validity of such consents under US and English law. Taken together, the articles in this issue represent another attempt to stretch and lead thinking in, and not just report about, the capital markets and legal practice in it. There is no reason to think that 2018 will be any less interesting than the last dozen years in which CMLJ has appeared. In selecting material for the Journal, innovation and practicality will continue to be our benchmarks as they have from the start. Our distinguished Editorial and Advisory Boards remain the unique resource that we can draw upon to find the right topics and authors to put in front of you. However, you, our readers, are the true inspiration for the project, and we would also like to take the opportunity of the start of a new Volume to thank you for your continued support. Footnotes 1 ‘UK bank scandals are making entrepreneurs reluctant borrowers’ Financial Times (London, 20 November 2017) 16. © The Author(s) (2017). Published by Oxford University Press. All rights reserved. For Permissions, please email: firstname.lastname@example.org
Capital Markets Law Journal – Oxford University Press
Published: Jan 1, 2018
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