Abstract
Today, legislators, courts, financial regulators and other actors at the EU and national level face major new challenges in safeguarding public and private interests in an increasingly digital and sustainability-minded environment surrounding financial markets. Innovative ways of addressing tensions between the common good and the individual preferences of market actors are needed to address these challenges. However, at present, the efforts to develop workable solutions are seriously hampered by the gap between the two areas of law that profoundly shape the financial markets—financial regulation and private law—in the current European policy discourse and legal scholarship. This article is an attempt to systematically rethink the role of private law in the regulatory and enforcement landscape for financial markets and its relationship with public regulation more generally. It argues that financial regulation and private law are not two parallel universes, but rather two sides of the same coin, each of which has a critical role to play in safeguarding public and private interests. Examining EU financial regulation through the ‘private law’ lens would enable us to unveil a complex interplay between the regulatory dimension, contractual settings and private law remedies that we need to better understand in order to be able to better regulate financial markets. Conversely, examining national private law through the European ‘regulatory’ lens would allow us to unpack the potential of traditional private law to contribute to the objectives of EU financial regulation, while at the same time realising justice between private parties.
Highlights
The relationships between private parties in the financial sector were traditionally the exclusive domain of private law
Examining European Union (EU) financial regulation through the ‘private law’ lens would enable us to unveil a complex interplay between the regulatory dimension, contractual settings and private law remedies that we need to better understand in order to be able to better regulate financial markets
Examining national private law through the European ‘regulatory’ lens would allow us to unpack the potential of traditional private law to contribute to the objectives of EU financial regulation, while at the same time realising justice between private parties
Summary
The relationships between private parties in the financial sector were traditionally the exclusive domain of private law. Multiple actors at the EU and Member State level are involved in rule-making, ensuring compliance with and the enforcement of multiple sets of rules These include legislators, financial regulators (including three European Supervisory Authorities (ESAs)—the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), and the European Insurance and Occupational Pensions Authority (EIOPA), as well as the European Central Bank (ECB)), courts (including the Court of Justice of the European Union (CJEU), as well as national administrative and civil courts), alternative dispute resolution (ADR) bodies, and the financial industry. This gap is well illustrated by some examples from retail financial market regulation, prudential financial regulation, and the enforcement domain more generally, which are discussed below These examples are used to demonstrate how private law considerations can be given more weight in the EU’s regulatory landscape, and when it comes to setting policy goals or standards, and in the context of supervision and enforcement. Black (2001), p 417. European Commission (2017a), p 4
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