Skip to main content
SpringerLink
Log in

Problematic Relationships: Why International Economic Law Is Sometimes More Complicated Than It Appears

  • Chapter
  • First Online:
European Yearbook of International Economic Law 2016

Part of the book series: European Yearbook of International Economic Law ((EUROYEAR,volume 7))

  • 1304 Accesses

Abstract

The international financial crisis of 2008 has gained a lot of attention from scholars from different disciplines. For many participants in the debate, the crisis was nothing else than an expression of a lack of effective international financial market regulations. Thus, to have better and “more” regulation on financial market instruments was seen as the key to preventing future crises. However, taking stock after about 7 years since the breakdown of Lehman Brothers makes clear that, first, finding adequate regulatory instruments for financial markets is certainly not as easy as it has often been suggested, and second, that there is a severe danger of overregulation with negative economic consequences. Celine Tan is not much interested in the intensive debate on possibilities, limitations and concepts on international financial market regulation. Instead, she simply asserts that there is a lack of “effective and equitable mechanisms for the regulation of international financial markets”. This assertion is supplemented by a description of public institutions such as the International Monetary Fund (IMF) providing financial resources to States that suffer from financial crises. Based on these two observations, it is clear for the author that “international public finance has been progressively conscripted to manage and mitigate the negative externalities caused by both market and regulatory failures”.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 129.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 169.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 169.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Similar content being viewed by others

Notes

  1. 1.

    For details on the systemic problems of regulating global financial markets see Lehmann and Tietje (2010); for a topical overview on the entire debate see Cottier et al. (2014).

  2. 2.

    Tan (2016), section 5.

  3. 3.

    This and the next sections of this comment are largely based on Tietje (2011, 2014).

  4. 4.

    Held et al. (1999), p. 191 et seq.

  5. 5.

    Mauro P et al. (2000) Emerging Market Spreads: Then versus Now. IMF Working Paper WT/00/190, p. 3, http://info.tuwien.ac.at/ccefm/workshop/imf_wp00190.pdf (last accessed 25 August 2015); Szodruch (2008), p. 73.

  6. 6.

    For details see Szodruch (2008), p. 73 et seq.

  7. 7.

    See Boughton JM (2002) Why White, not Keynes? Inventing the Postwar International Monetary System. IMF Working Paper, WP/02/52; Lastra (2006), p. 345, 351 et seq.

  8. 8.

    Boughton JM (2002) Why White, not Keynes? Inventing the Postwar International Monetary System. IMF Working Paper, WP/02/52, p. 11; for details on the opinion of John Maynard Keynes concerning capital controls see, e.g., Cohen (2006), p. 45 ff. comprehensively Moschella (2010), p. 5.

  9. 9.

    Keynes (1933), p. 769.

  10. 10.

    Boughton JM (2002) Why White, not Keynes? Inventing the Postwar International Monetary System. IMF Working Paper, WP/02/52, p. 13 ff.

  11. 11.

    Boughton JM (2002) Why White, not Keynes? Inventing the Postwar International Monetary System. IMF Working Paper, WP/02/52, p. 16 ff.

  12. 12.

    For details see, e.g., Schlemmer-Schulte (2015), para 85 et seq.; Lowenfeld (2008), p. 93 et seq.

  13. 13.

    Arner DW and Buckley RP (2010) Redesigning the architecture of the global financial system https://www.law.unimelb.edu.au/files/dmfile/download13c41.pdf (last accessed 24 September 2015), p. 6; Lastra (2006), p. 345, 354 et seq.

  14. 14.

    For details see de De Zayas A (2009) Marshall Plan (European Recovery Program). http://opil.ouplaw.com/view/10.1093/law:epil/9780199231690/law-9780199231690-e654?prd=EPIL (last accessed 25 August 2015).

  15. 15.

    Schlemmer-Schulte (2015), para 81.

  16. 16.

    See Article 1 Articles of Agreement of the International Monetary Fund, 27 December 1945, UNTS 2, 40 (IMF Agreement): ‘The purposes of the International Monetary Fund are: […] (2) To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy. (3) To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation’.

  17. 17.

    See, e.g., Lowenfeld (2008), p. 23 et seq.

  18. 18.

    See, e.g., Lowenfeld AF (2011) Monetary Law International. http://opil.ouplaw.com/view/10.1093/law:epil/9780199231690/law-9780199231690-e1537?rskey=lUyMEE&result=1&prd=EPIL (last accessed 25 August 2015).

  19. 19.

    ‘Members may exercise such controls as are necessary to regulate international capital movements […]’.

  20. 20.

    Keynes (1933), p. 769.

  21. 21.

    For details on this opinion namely of Keynes see Boughton JM (2002) Why White, not Keynes? Inventing the Postwar International Monetary System. IMF Working Paper, WP/02/52, p. 10; Moschella (2010), p. 5.

  22. 22.

    Lastra (2006), p. 345, 354 et seq.

  23. 23.

    Arner DW and Buckley RP (2010) Redesigning the architecture of the global financial system https://www.law.unimelb.edu.au/files/dmfile/download13c41.pdf (last accessed 24 September 2015), p. 5 ff.

  24. 24.

    Szodruch (2008), p. 52, with further references on Eurobonds in general; Lastra (2006), p. 371, 396 et seq.

  25. 25.

    See, e.g., Arner DW and Buckley RP (2010) Redesigning the architecture of the global financial system https://www.law.unimelb.edu.au/files/dmfile/download13c41.pdf (last accessed 24 September 2015), p. 10.

  26. 26.

    Schlemmer-Schulte (2015), para 50 et seq.

  27. 27.

    Szodruch (2008), p. 52, 89 et seq.

  28. 28.

    For details see Rost (2009), p. 319.

  29. 29.

    Norton (2010), p. 266.

  30. 30.

    Very comprehensively on this Norton (2010), p. 272 et seq.

  31. 31.

    On the causes of the crisis see, e.g., Hellwig (2010), p. 365 ff.; Ohler (2010), p. 6 et seq.; comprehensively Obstfeld M, Rogoff K (2009) Global Imbalances and the Financial Crisis: Products of Common Causes, http://www.frbsf.org/economics/conferences/aepc/2009/09_Obstfeld.pdf (last accessed 25 August 2015); Lastra and Wood (2010), p. 531.

  32. 32.

    Tan (2016), section 3.2.

  33. 33.

    Comprehensively Szodruch (2008).

  34. 34.

    For details see Koch (2004), p. 665; Schill (2008), p. 65.

  35. 35.

    Lehmann and Tietje (2010), p. 6668 et seq.; see also Weber (2010), p. 683.

  36. 36.

    Lehmann and Tietje (2010), p. 663 seq.; similar Weber (2010), p. 684: “International regulation and supervision is not’ naturally superior’ to regional or national rules and supervisory practices or vice versa”; for details see also Trachtman (2010), p. 719.

  37. 37.

    Garicano and Lastra (2010), p. 599.

  38. 38.

    For a comprehensive discussion on this see Posner EA, Sykes AO (2012) International Law and the Limits of Macroeconomic Cooperation. Institute for Law and Economics Working Paper No. 609, p. 41 et seq., http://ssrn.com/abstract=2120890 (last accessed 7 September 2015).

  39. 39.

    Committee on International Economic Policy and Reform, Rethinking Central Banking, September 2011, iii.

  40. 40.

    Posner EA, Sykes AO (2012) International Law and the Limits of Macroeconomic Cooperation. Institute for Law and Economics Working Paper No. 609, p. 44, http://ssrn.com/abstract=2120890 (last accessed 7 September 2015).

  41. 41.

    Tan (2016), section 2.2.

  42. 42.

    Brummer (2012).

  43. 43.

    On Global Administrative Law see, e.g., Kingsbury et al. (2005), p. 15; Cassese S et al. (2008) Global Administrative Law—Cases, Materials, Issues. 2nd ed., http://www.iilj.org/GAL/documents/GALCasebook2008.pdf (last accessed 7 September 2015); for a comprehensive overview on Global Administrative Law see: Bibliographical Resources, http://www.iilj.org/GAL/documents/GALBibliographyMDeBellisJune2006.pdf (last accessed 7 September 2015).

  44. 44.

    Andritzky JR (2012) Government Bonds and Their Investors: What Are the Facts and Do They Matter? IMF Working Paper (WP/12/158).

  45. 45.

    Tan (2016), section 2.2.

References

  • Brummer C (2012) Soft law and the global financial system—rule making in the 21st century. Cambridge University Press, Cambridge

    Google Scholar 

  • Cohen BJ (2006) Monetary governance and capital mobility in historical perspective. In: Grote R, Marauhn T (eds) The regulation of international financial markets—perspective for reform. Cambridge University Press, Cambridge, pp 27–53

    Chapter  Google Scholar 

  • Cottier T, Lastra RM, Tietje C, Satragno L (eds) (2014) The rule of law in monetary affairs. Cambridge University Press, Cambridge

    Google Scholar 

  • Garicano L, Lastra RM (2010) Towards a new architecture for financial stability: seven principles. J Int Econ Law 13(3):597–621

    Article  Google Scholar 

  • Held D, McGrew AG, Goldblatt D, Perraton J (1999) Global transformations. Stanford University Press, Stanford

    Google Scholar 

  • Hellwig M (2010) Finanzkrise und reformbedarf. In: Hellwig M, Höfling W, Zimmer D (eds) Finanzmarktregulierung: Welche Regelungen empfehlen sich für den deutschen und europäischen Finanzsektor? Gutachten E/F/G zum 68. Deutschen Juristentag. Verlag C.H. Beck, München, pp E5—E 57

    Google Scholar 

  • Keynes JM (1933) National self-sufficiency. Yale Rev 22(4):755–769

    Google Scholar 

  • Kingsbury B, Krisch N, Stewart RB (2005) The emergence of global administrative law. Law Contemp Probl 68:15–61

    Google Scholar 

  • Koch EB (2004) Collective action clauses—the way forward. Georgetown J Int Law 35(4):665–692

    Google Scholar 

  • Lastra RM (2006) Legal foundations of international monetary stability. Oxford University Press, Oxford

    Google Scholar 

  • Lastra RM, Wood G (2010) The crisis of 2007–09: nature, causes, and reactions. J Int Econ Law 13(3):531–550

    Article  Google Scholar 

  • Lehmann M, Tietje C (2010) The role and prospects of international law in financial regulation and supervision. J Int Econ Law 13(3):663–682

    Article  Google Scholar 

  • Lowenfeld AF (2008) International economic law, 2nd edn. Oxford University Press, Oxford

    Google Scholar 

  • Moschella M (2010) Governing risk—the IMF and global financial crises. Palgrave Macmillan, Basingstoke

    Google Scholar 

  • Norton JJ (2010) NIFA-II or “Bretton-Woods-II”? The G-20 (Leaders) Summit process on managing global financial markets and the world economy—Quo Vadis? J Bankng Regul 11(4):261–301

    Article  Google Scholar 

  • Ohler C (2010) International regulation and supervision of financial markets after the crisis. Eur Yearb Int Econ Law 1:3–29

    Google Scholar 

  • Rost B (2009) Basel committee on banking supervision. In: Tietje C, Brouder A (eds) Handbook of transnational economic governance regimes. Martinus Nijhoff, Leiden, pp 319–328

    Chapter  Google Scholar 

  • Schill S (2008) Der völkerrechtliche Staatsnotstand in der Entscheidung des BVerfG zu Argentinischen Staatsanleihen—Anachronismus oder Avantgarde? Zeitschrift für ausländisches öffentliches Recht und Völkerrecht 68:45–67

    Google Scholar 

  • Schlemmer-Schulte S (2015) Internationales Währungs—und Finanzrecht. In: Tietje C (ed) Internationales Wirtschaftsrecht, 2nd edn. De Gruyter, Berlin, pp 434–508

    Google Scholar 

  • Szodruch A (2008) Staateninsolvenz und private Gläubiger—Rechtsprobleme des Private Sector Involvement bei staatlichen Finanzkrisen im 21. Jahrhundert. Berlin, Berliner Wissenschafts-Verlag

    Google Scholar 

  • Tan C (2016) Shifting sands: interrogating the problematic relationship between international public finance and international financial regulation. In: Bungenberg M, Hermann C, Krajewski M, Terchechte JP (eds) European yearbook of international economic Law, vol 7. Springer, Heidelberg, pp 343–375

    Google Scholar 

  • Tietje C (2011) The international financial architecture as a legal order. Ger Yearb Int Law 54:11–45

    Google Scholar 

  • Tietje C (2014) The role of law in monetary affairs: taking stock. In: Cottier T, Lastra RM, Tietje C, Satragno L (eds) The rule of law in monetary affairs. Cambridge University Press, Cambridge, pp 11–44

    Chapter  Google Scholar 

  • Trachtman JP (2010) The international law of financial crisis: spillovers, subsidiarity, fragmentation and cooperation. J Int Econ Law 13(3):719–742

    Article  Google Scholar 

  • Weber RH (2010) Multilayered governance in international financial regulation and supervision. J Int Econ Law 13(3):683–704

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Martin-Luther-University, Halle-Wittenberg, Germany

    Christian Tietje

Authors
  1. Christian Tietje
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Christian Tietje .

Editor information

Editors and Affiliations

  1. Chair for Public Law, International and European Law, Saarland University, Saarbrücken, Germany

    Marc Bungenberg

  2. Faculty of Law, University of Passau , Passau, Germany

    Christoph Herrmann

  3. Chair for Public Law and International Law, University of Erlangen-Nürnberg Faculty of Law, Erlangen, Germany

    Markus Krajewski

  4. Competition and Regulation Institute, Leuphana University of Lüneburg, Lüneburg, Germany

    Jörg Philipp Terhechte

Rights and permissions

Reprints and permissions

Copyright information

© 2016 Springer International Publishing Switzerland

About this chapter

Cite this chapter

Tietje, C. (2016). Problematic Relationships: Why International Economic Law Is Sometimes More Complicated Than It Appears. In: Bungenberg, M., Herrmann, C., Krajewski, M., Terhechte, J. (eds) European Yearbook of International Economic Law 2016. European Yearbook of International Economic Law, vol 7. Springer, Cham. https://doi.org/10.1007/978-3-319-29215-1_15

Download citation

  • DOI: https://doi.org/10.1007/978-3-319-29215-1_15

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-29214-4

  • Online ISBN: 978-3-319-29215-1

  • eBook Packages: Law and CriminologyLaw and Criminology (R0)

Publish with us

Policies and ethics

Search

Navigation