Regulatory competition for EU financial services

Journal of International Economic Law

Volumn 3, Issue 2, 2000, Pages 349-375

  Hertig, Gérard ^a  

^a NONE

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EID: 0034393013     PISSN: 13693034     EISSN: None     Source Type: Journal    
DOI: 10.1093/jiel/3.2.349     Document Type: Article

References (100)

1. Unless banking services are specifically mentioned, references to financial services should be read as including banking services.
2. For a discussion of the probability of such an outcome, see C. Mayer, 'The Regulation of Financial Services: Lessons from the UK for 1992' in M. Bishop, J. Kay, and C. Mayer (eds), The Regulatory Challenge (Oxford: Oxford University Press 1995) 138 at 156. See generally L. Bebchuk and A. Ferrell, 'Federalism and Takeover Law: The Race to Protect Managers from Takeovers', 99 Colum L Rev 1168 (1999); A. Licht, 'Regulatory Arbitrage for Real International Securities Regulation in a World of Interacting Securities Markets', 38 Va J Int'l L 563 (1998).
3. For a discussion of the probability of such an outcome, see C. Mayer, 'The Regulation of Financial Services: Lessons from the UK for 1992' in M. Bishop, J. Kay, and C. Mayer (eds), The Regulatory Challenge (Oxford: Oxford University Press 1995) 138 at 156. See generally L. Bebchuk and A. Ferrell, 'Federalism and Takeover Law: The Race to Protect Managers from Takeovers', 99 Colum L Rev 1168 (1999); A. Licht, 'Regulatory Arbitrage for Real International Securities Regulation in a World of Interacting Securities Markets', 38 Va J Int'l L 563 (1998).
4. For a discussion of the probability of such an outcome, see C. Mayer, 'The Regulation of Financial Services: Lessons from the UK for 1992' in M. Bishop, J. Kay, and C. Mayer (eds), The Regulatory Challenge (Oxford: Oxford University Press 1995) 138 at 156. See generally L. Bebchuk and A. Ferrell, 'Federalism and Takeover Law: The Race to Protect Managers from Takeovers', 99 Colum L Rev 1168 (1999); A. Licht, 'Regulatory Arbitrage for Real International Securities Regulation in a World of Interacting Securities Markets', 38 Va J Int'l L 563 (1998).
5. See Council Directive 88/361/EEC of 24 June 1988 for the Implementation of Article 67 of the Treaty, 1988 OJ (L 178) 5.
6. See W. Molle, The Economics of European Integration: Theory, Practice, Policy 145-47 (3rd edn, Aldershot: Ashgate Publishing Ltd 1997).
7. See J. Pelkmans, European Integration: Methods and Economic Analysis 110 (Heerlen: Open University of the Netherlands 1997).
8. See 'Completing the Internal Market: White Paper from the Commission to the European Council', COM(85)310 final.
9. Insurance activities will not be the subject of a specific analysis, as their regulation is likely to be significantly overhauled and subjected to requirements comparable to those applicable to other supervised financial intermediaries.
10. See G. Hertig, 'Imperfect Mutual Recognition for EU Financial Services' in R. Buxbaum, G. Hertig, A. Hirsch, and K. Hopt (eds), European Business and Economic Law 218 (Berlin/NewYork: Walter de Gruyter 1996).
11. See P. Stephan, 'Regulatory Cooperation and Competition: The Search for Virtue' (1999) (University of Virginia School of Law Legal Studies Working Paper No 99-12, available at http:// www.ssrn.com).
12. See Case C-384/93, Alpine Investments BV v. Minister van Financien, 1995 ECR I-1167; Case 205/ 84, Commission v. Germany, 1986 ECR 3775.
13. A. Sykes, 'The (Limited) Role of Regulatory Harmonization in International Goods and Services Markets', 2 J Intl Econ L 49, 51 (1999).
14. In a recent speech, the President of the European Central Bank was compelled to admit that few national statistics serve as accurate guides for trends in the euro-zone. See T. Barber, 'Monetary Union Seen Resting on Integration', Financial Times (7 September 1999), at 2; see also OECD, The OECD Report on Regulatory Reform, Vol. 1: Sectorial Studies 82-83 (Paris: OECD 1997).
15. In a recent speech, the President of the European Central Bank was compelled to admit that few national statistics serve as accurate guides for trends in the euro-zone. See T. Barber, 'Monetary Union Seen Resting on Integration', Financial Times (7 September 1999), at 2; see also OECD, The OECD Report on Regulatory Reform, Vol. 1: Sectorial Studies 82-83 (Paris: OECD 1997).
16. See T. Hoschka, Cross-Border Entry in European Retail Financial Services: Determinants, Regulation and the Impact on Competition 19-24 (New York: St Martin's Press 1993).
17. See J. Danthine et al., The Future of European Banking 46-47 (London: Center for Economic Policy Research 1999).
18. See I. Walter, 'Financial Services Strategies in the Euro-Zone', 17 Eur Mgmt J 447, 450 (1999).
19. See Danthine et al., above n 14 at 33.
20. See T. Padoa-Schioppa, 'EMU and Banking Supervision', 2 Intl Fin 295, 298 (1999).
21. See M. Centeno and A. Mello, 'How Integrated Are the Money Market and the Bank Loans Market Within the European Union?', 18 J Int'l Money & Fin 75 (1999).
22. See European Central Bank, Possible Effects of EMU on the EU Banking Systems in the Medium to Long Term 18-20 (Frankfurt am Main: European Central Bank 1999).
23. See J. Guyon, 'The Coming Battle of Europe's Banks', Fortune (20 December 1999), at 66-67; see also R. Smith, 'The European Securities Industry Under a Single Currency' in J. Dermine and P. Hillon, European Capital Markets with a Single Currency 310 at 338 (Oxford: Oxford University Press 1999); J. Dermine, 'The Economics of Bank Mergers in the European Union: A Review of the Public Policy Issues', (1999) INSEAD Working Paper No. 99/35/FIN at http://papers.ssrn.com.
24. See J. Guyon, 'The Coming Battle of Europe's Banks', Fortune (20 December 1999), at 66-67; see also R. Smith, 'The European Securities Industry Under a Single Currency' in J. Dermine and P. Hillon, European Capital Markets with a Single Currency 310 at 338 (Oxford: Oxford University Press 1999); J. Dermine, 'The Economics of Bank Mergers in the European Union: A Review of the Public Policy Issues', (1999) INSEAD Working Paper No. 99/35/FIN at http://papers.ssrn.com.
25. See J. Guyon, 'The Coming Battle of Europe's Banks', Fortune (20 December 1999), at 66-67; see also R. Smith, 'The European Securities Industry Under a Single Currency' in J. Dermine and P. Hillon, European Capital Markets with a Single Currency 310 at 338 (Oxford: Oxford University Press 1999); J. Dermine, 'The Economics of Bank Mergers in the European Union: A Review of the Public Policy Issues', (1999) INSEAD Working Paper No. 99/35/FIN at http://papers.ssrn.com.
26. See Bulletin Quotidien Europe No 7491 (17 November 1999) at 11.
27. There were close to 70 hostile deals in Europe in 1999 (compared to 15-35 annually from 1994 to 1998), with a total value of US$400 billion (compared to less than US$50 billion per year between 1994 and 1998). See E. Portanger, 'Bankers Tout Takeover Defense Role in New Europe', The Wall Street Journal Europe (24 November 1999) at 16; see also European Central Bank, above n 19 at Annex 2 at 8.
28. See R. Schmidt, A. Hackethal, and M. Tyrell, 'Disintermediation and the Role of Banks in Europe: An International Comparison', 8 J Fin Intermediation 68 (1999); Danthine et al., above n 14 at 103.
29. See R. Schmidt, A. Hackethal, and M. Tyrell, 'Disintermediation and the Role of Banks in Europe: An International Comparison', 8 J Fin Intermediation 68 (1999); Danthine et al., above n 14 at 103.
30. See P. Zurstrassen, 'The European Investment Funds Industry in 1997' in OECD, Institutional Investors in the New Landscape (Paris: OECD 1998) 207 at 209-10, 227.
31. See I. Walter, Global Competition in Financial Services (Cambridge: Harvard University Press 1988).
32. Supplementary Pensions in the Single Market: Green Paper from the Commission to the European Council, COM(97)283 final.
33. See R. Smith and I. Walter, Global Banking (Oxford: Oxford University Press 1999); Danthine et al., above n 14 at 37-40.
34. See R. Smith and I. Walter, Global Banking (Oxford: Oxford University Press 1999); Danthine et al., above n 14 at 37-40.
35. See E. Luce, 'Euro Proves Top Currency for Bonds', Financial Times (16 December 1999) at 17; M. Sesit, 'Euro May Be Weak, But Look at What It's Made Possible', Wall St J Eur (1 December 1999) at 1, 4.
36. See E. Luce, 'Euro Proves Top Currency for Bonds', Financial Times (16 December 1999) at 17; M. Sesit, 'Euro May Be Weak, But Look at What It's Made Possible', Wall St J Eur (1 December 1999) at 1, 4.
37. M&A with European companies as target were worth US$1,200 billion, of which half were European cross-border mergers. See 'The Construction of Europe', Financial Times (1 January 2000), at 26.
38. See J. Dermine, 'European Capital Markets: Does the Euro Matter?' in J. Dermine and P. Hillon, European Capital Markets with a Single Currency 1 at 12 (Oxford: Oxford University Press 1999); Walter, above n 15 at 448.
39. See J. Dermine, 'European Capital Markets: Does the Euro Matter?' in J. Dermine and P. Hillon, European Capital Markets with a Single Currency 1 at 12 (Oxford: Oxford University Press 1999); Walter, above n 15 at 448.
40. A European Commission survey shows that by the end of 1999, the vast majority of companies and consumers were still not doing their accounting or invoicing in euros. See 'Use of Euro Is Limited, EU Survey Says', Wall St J Eur (14 December 1999) at 31.
41. See N. Horn, 'The Monetary Union and the Internal Market for Banking and Investment Services', 10 Eur Bus L Rev 150 (1999).
42. See B. Steil, 'Equity Trading IV: The ISD and the Regulation of European Market Structure' in B. Steil (ed), The European Equity Markets, the State of the Union and an Agenda for the Millennium (London: The Royal Institute of Internal Affairs 1996) 113 at 131-34; R. Lee, 'Regulation of Capital Markets in the European Union' in P. Newman (ed), 3 The New Palgrave Dictionary of Economics and the Law 228 at 230-31 (London: Macmillan Reference Ltd 1998).
43. See B. Steil, 'Equity Trading IV: The ISD and the Regulation of European Market Structure' in B. Steil (ed), The European Equity Markets, the State of the Union and an Agenda for the Millennium (London: The Royal Institute of Internal Affairs 1996) 113 at 131-34; R. Lee, 'Regulation of Capital Markets in the European Union' in P. Newman (ed), 3 The New Palgrave Dictionary of Economics and the Law 228 at 230-31 (London: Macmillan Reference Ltd 1998).
44. Council Directive 93/22/EEC of 10 May 1993 on Investment Services in the Securities Field, 1993 OJ (L 141) 27.
45. See R. Lee, What Is an Exchange? The Automation, Management and Regulation of Financial Markets 296 (Oxford: Oxford University Press 1998).
46. See I. Giddy, A. Saunders, and I. Walter, 'Clearance and Settlement' in B. Steil (ed), The European Equity Markets, the State of the Union and an Agenda for the Millennium 321 (London: The Royal Institute of Internal Affairs 1996).
47. For a critical assessment, see, e.g., D. Shirreff, 'Disgrace at the Heart of Europe', Euromoney (October 1999) at 75-78.
48. See Horn, above n 32 at 155.
49. See Danthine et al., above n 14 at 45.
50. See A. Licht, 'Games Commissions Play: 2×2 Games of International Securities Regulation', 24 Yale J Intl L 61 (1999).
51. See O. Fuerst, 'A Theoretical Analysis of the Investor Protection Regulations. Argument for Global Listing of Stocks' (1998) (International Center for Finance at Yale Working Paper, available at http://www.ssrn.com).
52. See F. Easterbrook, 'Federalism and European Business Law', 14 Intl Rev L & Econ 125 (1994); R. Revesz, 'Federalism and Environmental Regulation: A Normative Critique' in F. Ferejohn and B. Weingast (eds), The New Federalism: Can the States Be Trusted? 97 (Stanford: Hoover Institution Press 1997); R. Revesz, 'The Race to the Bottom and Federal Environmental Regulation: A Response to Critics', 82 Minn L Rev 535 (1997).
53. See F. Easterbrook, 'Federalism and European Business Law', 14 Intl Rev L & Econ 125 (1994); R. Revesz, 'Federalism and Environmental Regulation: A Normative Critique' in F. Ferejohn and B. Weingast (eds), The New Federalism: Can the States Be Trusted? 97 (Stanford: Hoover Institution Press 1997); R. Revesz, 'The Race to the Bottom and Federal Environmental Regulation: A Response to Critics', 82 Minn L Rev 535 (1997).
54. See F. Easterbrook, 'Federalism and European Business Law', 14 Intl Rev L & Econ 125 (1994); R. Revesz, 'Federalism and Environmental Regulation: A Normative Critique' in F. Ferejohn and B. Weingast (eds), The New Federalism: Can the States Be Trusted? 97 (Stanford: Hoover Institution Press 1997); R. Revesz, 'The Race to the Bottom and Federal Environmental Regulation: A Response to Critics', 82 Minn L Rev 535 (1997).
55. See R. Levich, 'The Euromarkets After 1992' in J. Dermine, European Banking in the 1990s 373 (Oxford: Basil Blackwell Ltd 1990); Smith and Walter, above n 27.
56. See R. Levich, 'The Euromarkets After 1992' in J. Dermine, European Banking in the 1990s 373 (Oxford: Basil Blackwell Ltd 1990); Smith and Walter, above n 27.
57. For a less optimistic perspective, see Mayer, above n 2 at 156.
58. For support with respect to the banking sector, see Padoa-Schioppa, above n 17.
59. See Communication from the Commission - Implementing the Framework for Financial Markets: Action Plan, COM(99)232 final.
60. See Y. Hassany, 'Italian Securitization Boosts Banks', Wall St J Eur (6 September 1999) at 25.
61. For a description of the provisions adopted in the wake of the BCCI scandal, see P. Clarotti, 'The Implementation of the Second Banking Directive and Its Aftermath' in E. Wumeersch (ed), Further Perspectives in Financial Integration in Europe 43 at 52-53 (Berlin/New York: Walter de Gruyter 1994).
62. See, e.g., Council Directive 92/30/EEC of 6 April 1992 on the Supervision of Credit Institutions on a Consolidated Basis, 1992 OJ (L 110) 52, amended by Council Directive 93/6/EEC, 1993 OJ (L 141) 1.
63. See E. Baltensberger and J. Dermine, 'European Banking: Prudential and Regulatory Issues' in J. Dermine, European Banking in the 1990s 17 at 33 (Oxford: Basil Blackwell Ltd 1990).
64. See Goldman Sachs industry survey, reported in P. Coudret, 'Une Europe et quelques banques', Le Temps (24 August 1999) at 2-3.
65. See Lee, above n 33 at 230.
66. See D. Tirez, 'Easdaq Benefits from European Framework', Int'l Fin L Rev 11 (November 1997).
67. See 'No SECs Please, We're European', Economist (21 August 1999) at 62.
68. See C. Hoppmann, 'Europäische Börsenaufsicht', 10 Europaïsches Winschafts und Steuerrecht 204 (1999); G. Thieffry, 'Towards a European Securities Commision', Int'l Fin L Rev 14 (October 1997); Danthine et al., above n 14.
69. See C. Hoppmann, 'Europäische Börsenaufsicht', 10 Europaïsches Winschafts und Steuerrecht 204 (1999); G. Thieffry, 'Towards a European Securities Commision', Int'l Fin L Rev 14 (October 1997); Danthine et al., above n 14.
70. See C. Hoppmann, 'Europäische Börsenaufsicht', 10 Europaïsches Winschafts und Steuerrecht 204 (1999); G. Thieffry, 'Towards a European Securities Commision', Int'l Fin L Rev 14 (October 1997); Danthine et al., above n 14.
71. See D. Baudru and M. Kechidi, 'Les investisseurs institutionnels étrangers: Vers la fin du capitalisme à la française?', 48 Revue d'Economie Financière 93 (1998).
72. See Council Directive 98/27/EC of the European Parliament and Council of 19 May 1998 on Injunctions for the Protection of Consumers' Interests, 1998 OJ (L 166) 51.
73. See Communication from the Commission, above n 46; see also Proposal for a Council Directive Concerning the Distance Marketing of Consumer Financial Services, COM (98)468 final.
74. See E. Kane, 'Principal-Agent Problems in S&L Salvage', 45 J Fin 755 (1990); A. Boot and A. Thakor, 'Self-Interested Bank Regulation', 83 Am Econ Rev 206 (1993).
75. See E. Kane, 'Principal-Agent Problems in S&L Salvage', 45 J Fin 755 (1990); A. Boot and A. Thakor, 'Self-Interested Bank Regulation', 83 Am Econ Rev 206 (1993).
76. R. Baldwin and M. Cave, Understanding Regulation: Theory, Strategy and Practice (Oxford: Oxford University Press 1999) 150-79.
77. See G. Matlock, 'Proposed EU Rule Change for Index-Tracker Funds Draws Flack', Wall St J Eur (6 September 1999) at 24.
78. See G. Benston, 'International Harmonization of Banking Regulations and Cooperation Among National Regulators: An Assessment', 8 J Fin Serv Res 205, 221 (1994).
79. See R. Brand, 'Recognition of Foreign Judgments as a Trade Law Issue: The Economics of Private International Law' in J. Bhandari and A. Sykes (eds), Economic Dimensions in International Law: Comparative and Empirical Perspectives 592 (Cambridge: Cambridge University Press 1997).
80. See 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, 1972 OJ (C 299) 32; Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (Lugano Convention), 1988 OJ (L 319) 9.
81. See 1980 Rome Convention on the Law Applicable to Contractual Obligations (consolidated version), 1998 OJ (C 27) 34.
82. See Section 1 of Section 3.
83. See Section 2 of Section 3.
84. See 1980 Rome Convention, above n 65.
85. See Case 205/84, Commission v. Germany, 1986 ECR 3775; see also Cases C-267/91 and C-268/91, Keck and Mithouard, 1993 ECR I-6127; Case C-384/93, Alpine Investments BV v. Minister van Financien, 1995 ECR I-1167.
86. See T. Wernicke, Privates Bankvertragsrecht im EG-Binnenmarkt 86-87 (Baden-Baden: Nomos Verlagsgesellschaft 1996).
87. See H. Xanthaki, 'The Secondary Establishment of Companies Within the EU: Challenge or Missed Opportunity?', 10 Eur Bus L Rev 120 (1999).
88. Special Issue, 'Grenzüberschreitende Sitzverlegung von Gesellschaften in Europa', 28 Zeitschrift für Unternehmens- und Gesellschaftsrecht 1-156 (1999).
89. Case 81/87, The Queen v. H.M. Treasury and Commissioners of Inland Revenue ex parte Daily Mail and General Trust, 1988 ECR 5483.
90. See Case C-212/97, Centros Ltd v. Erhvervs- og Selskabsstyrelsen, 1999 ECJ CELEX LEXIS 2723 at (Black star)1.
91. For an overview, see A. Viandier, 'Free Movement and the Mobility of Companies', 9 Eur Bus L Rev 301 (1998).
92. See H. Hammen, 'Zweigniederlassungsfreiheit europäischer Gesellschaften und Mitbestimmung der Arbeitnehmer auf Unternehmensebene', 53 WM Zeitschrift für Wirtschafts und Bankrecht 2487 (1999).
93. See G. Schuster, Die internationale Anwendung des Börsenrechts: Völkerrechtlichen Rahmen und kollisionsrechtliche Praxis in Deutschland, England und den USA 603 (Berlin/Heidelberg/New York: Springer-Verlag 1996).
94. See, e.g., R. Romano, 'Empowering Investors: A Market Approach to Securities Regulation', 107 Yale LJ 2359 (1998).
95. See A. Hirsch, 'Worldwide Legal Harmonization of Banking Law and Securities Regulation' in R. Buxbaum, G. Hertig, A. Hirsch, and K. Hopt (eds), European Business and Economic Law 347 at 360 (Berlin/NewYork: Walter de Gruyter 1996).
96. See J. Dalhuisen, 'Liberalization and Re-Regulation of Cross-Border Financial Services: The Situation in the EU and WTO/GATS (Part 1)', 10 Eur Bus L Rev 158, 181 (1999).
97. See Padoa-Schioppa, above n 17; see also J. Louis et al., Banking Supervision in the European Community: Institutional Aspects (Brussels: Institut d'Etudes Européennes 1995).
98. See Padoa-Schioppa, above n 17; see also J. Louis et al., Banking Supervision in the European Community: Institutional Aspects (Brussels: Institut d'Etudes Européennes 1995).
99. See IMF, Toward a Framework for Financial Stability (Washington: IMF 1998).
100. For an overview, see K. Rogoff, 'International Institutions for Reducing Global Financial Instability', 13 J Econ Persp 21 (1999).