The new and fast evolving COVID-19 global pandemic has already caused, according to the IMF, 'the worst downturn since the great depression'. This paper considers what the history and scientific analysis of previous large scale economic and disease shocks and current economic modelling can tell us about the likely scale and location of the challenge to global business, which are likely to play out in due course through legal restructuring, bankruptcy and litigation channels. Previous economic shocks briefly considered include: the (2007-8) financial crisis and its aftermath, WW1 (1914-18) and WW2 (1939-45), Wall Street Crash (1929) and Great Depression (1930-36), the collapse of the FSU and its aftermath (1990-97) and the 9-11 attacks (2001). Previous epidemics and pandemics briefly considered include: Ebola, SARS, MERS, HIV/AIDS, Malaria, Asian flu (1957), Spanish flu (1918-19) and the Black Death (14th century). Initial epidemiological, SIR, and global economic modelling results and uncertainties are also considered, and some of the most vulnerable business sectors identified.
{"title":"COVID-19: Assessing Some Potential Global Economic, Business and Legal Impacts","authors":"Rupert Macey-Dare","doi":"10.2139/ssrn.3615148","DOIUrl":"https://doi.org/10.2139/ssrn.3615148","url":null,"abstract":"The new and fast evolving COVID-19 global pandemic has already caused, according to the IMF, 'the worst downturn since the great depression'. This paper considers what the history and scientific analysis of previous large scale economic and disease shocks and current economic modelling can tell us about the likely scale and location of the challenge to global business, which are likely to play out in due course through legal restructuring, bankruptcy and litigation channels. \u0000 \u0000Previous economic shocks briefly considered include: the (2007-8) financial crisis and its aftermath, WW1 (1914-18) and WW2 (1939-45), Wall Street Crash (1929) and Great Depression (1930-36), the collapse of the FSU and its aftermath (1990-97) and the 9-11 attacks (2001). \u0000 \u0000Previous epidemics and pandemics briefly considered include: Ebola, SARS, MERS, HIV/AIDS, Malaria, Asian flu (1957), Spanish flu (1918-19) and the Black Death (14th century). \u0000 \u0000Initial epidemiological, SIR, and global economic modelling results and uncertainties are also considered, and some of the most vulnerable business sectors identified.","PeriodicalId":174628,"journal":{"name":"English Law: Business (Topic)","volume":"52 10 Pt 2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132861694","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This dissertation will assess how underwriter misconduct in the claims process is combated by comparatively analyzing the jurisdictions of England and Wales and the United States of America (US). In England and Wales, assureds were previously barred from recovering damages for additional losses separate from the insurance indemnity. Section 13A of the Insurance Act 2015 has since introduced an implied term into the insurance contract that the insurer must pay claims within a reasonable time which, if breached, can amount to recovery of damages. However, this thesis will challenge whether the reforms and current regulatory practices provide adequate protection of assureds. In doing so, it will affirm the need to disincentivise the insurer from exploiting the imbalances inherent to the insurance contract that lie in their favor. Conversely, operation of American insurance law is significantly more assured- friendly. Specifically, legal actions and remedies for breach of contract, good faith, and statute are permitted, argued to satisfactorily safeguard the assured’s interests. This includes the controversial ability to recover punitive damages in cases of flagrant insurer misconduct. Ultimately, this thesis will suggest English law borrow specified elements of American law to strengthen regulation of the insurance industry and defeat underwriter opportunism.
{"title":"The Pursuit to Defeat Underwriter Opportunism: A Comparative Analysis of Combating Misconduct in the Claims Process","authors":"Gabriella Gropper","doi":"10.2139/ssrn.3702904","DOIUrl":"https://doi.org/10.2139/ssrn.3702904","url":null,"abstract":"This dissertation will assess how underwriter misconduct in the claims process is combated by comparatively analyzing the jurisdictions of England and Wales and the United States of America (US). In England and Wales, assureds were previously barred from recovering damages for additional losses separate from the insurance indemnity. Section 13A of the Insurance Act 2015 has since introduced an implied term into the insurance contract that the insurer must pay claims within a reasonable time which, if breached, can amount to recovery of damages. However, this thesis will challenge whether the reforms and current regulatory practices provide adequate protection of assureds. In doing so, it will affirm the need to disincentivise the insurer from exploiting the imbalances inherent to the insurance contract that lie in their favor. Conversely, operation of American insurance law is significantly more assured- friendly. Specifically, legal actions and remedies for breach of contract, good faith, and statute are permitted, argued to satisfactorily safeguard the assured’s interests. This includes the controversial ability to recover punitive damages in cases of flagrant insurer misconduct. Ultimately, this thesis will suggest English law borrow specified elements of American law to strengthen regulation of the insurance industry and defeat underwriter opportunism.","PeriodicalId":174628,"journal":{"name":"English Law: Business (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128789994","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
It is now established in employment law that an implied term of trust and confidence exists in the contract of employment which subjects’ parties to a duty not to conduct themselves without reason in such manner that will likely destroy or damage the existing trust and confidence between them. This duty developed from the duty of cooperation and has since assumed a central role in the contract of employment. Constructive dismissal under the Industrial Relations Act 1971 enhanced the popularity of the implied term of trust and confidence since it requires an employee to demonstrate that a contract was repudiated due to an employer’s breach of the contract.
Despite it being a mutual obligation on both parties, its effect on the employer has raised more issues in the courts than that on the employee. This may be based on the public view that employees are the weaker party in the contract and as such should be protected. On the other hand, an employer may use this implied term as a defence for dismissing an employee without notice.
Case-law has played an important role in the development of the employer’s duty of trust and confidence and parliament is yet to put in place a statute to constrain it or set out guidelines for its further development . There have been many arguments on the origin of the mutual trust and confidence. However most courts and employment tribunals have adopted the principle in Woods v W.M. Car Services (Peterborough) Ltd where Browne-Wilkinson J stated that “….employers will not without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.”
In this paper, the discussion shall be firstly, how the courts have extended or limited the scope of the employer’s duty of trust and confidence since Woods v W.M. Car Services and secondly factors which may affect the further development of the employer’s duty of trust and confidence.
{"title":"The Impact of Case Law on the Duty of Trust and Confidence in the English Legal System","authors":"Munachiso Ogu-Jude","doi":"10.2139/ssrn.3575500","DOIUrl":"https://doi.org/10.2139/ssrn.3575500","url":null,"abstract":"It is now established in employment law that an implied term of trust and confidence exists in the contract of employment which subjects’ parties to a duty not to conduct themselves without reason in such manner that will likely destroy or damage the existing trust and confidence between them. This duty developed from the duty of cooperation and has since assumed a central role in the contract of employment. Constructive dismissal under the Industrial Relations Act 1971 enhanced the popularity of the implied term of trust and confidence since it requires an employee to demonstrate that a contract was repudiated due to an employer’s breach of the contract. <br><br>Despite it being a mutual obligation on both parties, its effect on the employer has raised more issues in the courts than that on the employee. This may be based on the public view that employees are the weaker party in the contract and as such should be protected. On the other hand, an employer may use this implied term as a defence for dismissing an employee without notice.<br><br>Case-law has played an important role in the development of the employer’s duty of trust and confidence and parliament is yet to put in place a statute to constrain it or set out guidelines for its further development . There have been many arguments on the origin of the mutual trust and confidence. However most courts and employment tribunals have adopted the principle in Woods v W.M. Car Services (Peterborough) Ltd where Browne-Wilkinson J stated that “….employers will not without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.” <br><br>In this paper, the discussion shall be firstly, how the courts have extended or limited the scope of the employer’s duty of trust and confidence since Woods v W.M. Car Services and secondly factors which may affect the further development of the employer’s duty of trust and confidence. <br>","PeriodicalId":174628,"journal":{"name":"English Law: Business (Topic)","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125374172","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Human rights violations are perpetrated by corporate actors with troubling frequency. In most cases, plaintiffs do not have access to remedy. For 30 years, the United States has been a beacon of hope, its courts adjudicating human rights claims against corporate defendants under the Alien Tort Statute. Then, in Kiobel v. Royal Dutch Petroleum, the Supreme Court closed the door on human rights plaintiffs. This Article charts the rise of the United Kingdom as a venue to bring suit. The U.K. Supreme Court, in a far-reaching judgment from 2019, upheld a decision to allow plaintiffs to sue a London-headquartered parent company for grave environmental damage and harm to local communities’ livelihoods that occurred through the operations of the company’s Zambian subsidiary. The dichotomy in approaches between the U.S. and the U.K. courts has prompted consideration of the following: is there anything that can be drawn from the U.K. litigation to improve access to remedy in the U.S. courts for victims of human rights violations by corporate actors? The article concludes that the argument used in the U.K. case law to attribute liability directly to parent companies should be taken up in the U.S.
{"title":"Parent Company Direct Liability for Overseas Human Rights Violations: Lessons from the UK Supreme Court","authors":"Rachel Chambers","doi":"10.2139/ssrn.3682273","DOIUrl":"https://doi.org/10.2139/ssrn.3682273","url":null,"abstract":"Human rights violations are perpetrated by corporate actors with troubling frequency. In most cases, plaintiffs do not have access to remedy. For 30 years, the United States has been a beacon of hope, its courts adjudicating human rights claims against corporate defendants under the Alien Tort Statute. Then, in Kiobel v. Royal Dutch Petroleum, the Supreme Court closed the door on human rights plaintiffs. This Article charts the rise of the United Kingdom as a venue to bring suit. The U.K. Supreme Court, in a far-reaching judgment from 2019, upheld a decision to allow plaintiffs to sue a London-headquartered parent company for grave environmental damage and harm to local communities’ livelihoods that occurred through the operations of the company’s Zambian subsidiary. The dichotomy in approaches between the U.S. and the U.K. courts has prompted consideration of the following: is there anything that can be drawn from the U.K. litigation to improve access to remedy in the U.S. courts for victims of human rights violations by corporate actors? The article concludes that the argument used in the U.K. case law to attribute liability directly to parent companies should be taken up in the U.S.","PeriodicalId":174628,"journal":{"name":"English Law: Business (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129005706","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article is based on the text of a speech delivered by Oliver Bethell on 13 November 2019 at the Econolex Beesley lecture series, held in partnership with the Institute of Economic Affairs and the Centre for Competition and Regulatory Policy at City, University of London.
{"title":"Applying Economics to the Internet: Can Regulators and Competition Authorities Keep Pace?","authors":"Oliver Bethell, Alexander Waksman","doi":"10.2139/ssrn.3492966","DOIUrl":"https://doi.org/10.2139/ssrn.3492966","url":null,"abstract":"This article is based on the text of a speech delivered by Oliver Bethell on 13 November 2019 at the Econolex Beesley lecture series, held in partnership with the Institute of Economic Affairs and the Centre for Competition and Regulatory Policy at City, University of London.","PeriodicalId":174628,"journal":{"name":"English Law: Business (Topic)","volume":"102 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123695768","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There are frequent calls for financial markets to be more actively regulated by state agencies, such as the Financial Conduct Authority or the Prudential Regulation Authority. They reflect neo-classical, market-failure approaches to economics, which suggest that the market does not maximise welfare if certain conditions do not hold and that government action is required to move the market towards the welfare-maximising position. But we cannot know whether government regulatory action will move us away from or towards the welfare-maximising position unless we also make unrealistic assumptions about behaviour in regulatory agencies. The neo-classical, market-failure approach therefore takes us down an intellectual rabbit hole. It is instead possible to think of regulation as part of the set of services provided by the market, rather than something that to be done to the market ex-post. The discovery of regulatory organisations is part of the entrepreneurial market process. Regulatory institutions evolving within the market continue to evolve, despite the attempts by government agencies to regulate markets in very detailed ways. Modern examples would include the International Swaps and Derivatives Association (ISDA), whose record during the financial crisis was faultless. There are disadvantages arising from private regulatory bodies: they can encourage cartelistic behaviour and may prove less effective where the economic activity in question gives rise to widespread social costs beyond market participants. However, we should reject market failure analysis and operate under the assumption that the market can provide regulatory services because they are valued by market participants. Where statutory regulation is used, it should generally be voluntary with products not regulated by the statutory regulator being clearly identified as such.
{"title":"Regulation Without the State: The Example of Financial Services","authors":"P. Booth","doi":"10.2139/ssrn.3852622","DOIUrl":"https://doi.org/10.2139/ssrn.3852622","url":null,"abstract":"There are frequent calls for financial markets to be more actively regulated by state agencies, such as the Financial Conduct Authority or the Prudential Regulation Authority. They reflect neo-classical, market-failure approaches to economics, which suggest that the market does not maximise welfare if certain conditions do not hold and that government action is required to move the market towards the welfare-maximising position. But we cannot know whether government regulatory action will move us away from or towards the welfare-maximising position unless we also make unrealistic assumptions about behaviour in regulatory agencies. The neo-classical, market-failure approach therefore takes us down an intellectual rabbit hole. It is instead possible to think of regulation as part of the set of services provided by the market, rather than something that to be done to the market ex-post. The discovery of regulatory organisations is part of the entrepreneurial market process. Regulatory institutions evolving within the market continue to evolve, despite the attempts by government agencies to regulate markets in very detailed ways. Modern examples would include the International Swaps and Derivatives Association (ISDA), whose record during the financial crisis was faultless. There are disadvantages arising from private regulatory bodies: they can encourage cartelistic behaviour and may prove less effective where the economic activity in question gives rise to widespread social costs beyond market participants. However, we should reject market failure analysis and operate under the assumption that the market can provide regulatory services because they are valued by market participants. Where statutory regulation is used, it should generally be voluntary with products not regulated by the statutory regulator being clearly identified as such.","PeriodicalId":174628,"journal":{"name":"English Law: Business (Topic)","volume":"11 12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133846534","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The purpose of this research is to assess the impact of Brexit on the global financial markets, i.e.: i) the impact of ‘passporting’, ii) the third-country access, iii) the impact on financial services contracts, and iv) briefly on Fintech.
{"title":"The Impact of 'Brexit' on the Global Financial Markets","authors":"Francisc Ioanid Toma","doi":"10.2139/SSRN.3270606","DOIUrl":"https://doi.org/10.2139/SSRN.3270606","url":null,"abstract":"The purpose of this research is to assess the impact of Brexit on the global financial markets, i.e.: i) the impact of ‘passporting’, ii) the third-country access, iii) the impact on financial services contracts, and iv) briefly on Fintech.","PeriodicalId":174628,"journal":{"name":"English Law: Business (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129489519","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The first English case to deal with a share-splitting exercise, Re Dee Valley Group plc [2017] EWHC 184 (Ch), showcases the broader implications that stem from the law providing various participants with extensive power relating to the approval and the sanctioning of transfer schemes.The paper addresses the under-discussed issues relating to the use and abuse of power during the scheme approval process, and the reasons why these require closer attention than they have hitherto received. It begins by providing an overview of how transfer schemes are regulated and proceeds with an examination of the case of Re Dee Valley Group plc, which raises whether share-splitting is an objectionable practice, how the notion of ‘class interests’ should be interpreted, and what the nature of the shareholders’ meeting that approves a scheme is. Further on, the articles examines the practical and policy considerations underlying the procedural rules, which further allows to consider their efficacy in today’s socioeconomic context. Proposals for reform centre around revisiting the power provided to the majority in number and majority in value respectively and revisiting the divide between conflicting and diverging interests within the context of the interpretation of the notion of “class interests” at the sanction stage.
Re Dee Valley Group plc [2017] EWHC 184 (Ch)是英国第一个涉及股份分割的案例，它展示了法律赋予各种参与者与批准和制裁转让计划有关的广泛权力所产生的更广泛的影响。该文件阐述了在计划审批过程中有关权力使用和滥用的未被讨论的问题，以及为什么这些问题需要比以往更密切关注的原因。本文首先概述了转让计划是如何受到监管的，然后对Re Dee Valley Group plc的案例进行了研究，该案例提出了分股是否是一种令人反感的做法，“阶级利益”的概念应该如何解释，以及批准该计划的股东大会的性质是什么。此外，文章还考察了程序规则背后的实际和政策考虑因素，从而进一步考虑它们在当今社会经济背景下的效力。改革建议的核心是重新审视在数量上和价值上分别给予多数人的权力，以及在制裁阶段解释“阶级利益”概念的背景下重新审视冲突和分歧的利益之间的分歧。
{"title":"Use and Abuse of Power in Changes of Corporate Control: Transfer Schemes and Shareholders' Voting Practices in Uncharted Waters","authors":"G. Tsagas","doi":"10.2139/SSRN.3152468","DOIUrl":"https://doi.org/10.2139/SSRN.3152468","url":null,"abstract":"The first English case to deal with a share-splitting exercise, Re Dee Valley Group plc [2017] EWHC 184 (Ch), showcases the broader implications that stem from the law providing various participants with extensive power relating to the approval and the sanctioning of transfer schemes.The paper addresses the under-discussed issues relating to the use and abuse of power during the scheme approval process, and the reasons why these require closer attention than they have hitherto received. It begins by providing an overview of how transfer schemes are regulated and proceeds with an examination of the case of Re Dee Valley Group plc, which raises whether share-splitting is an objectionable practice, how the notion of ‘class interests’ should be interpreted, and what the nature of the shareholders’ meeting that approves a scheme is. Further on, the articles examines the practical and policy considerations underlying the procedural rules, which further allows to consider their efficacy in today’s socioeconomic context. Proposals for reform centre around revisiting the power provided to the majority in number and majority in value respectively and revisiting the divide between conflicting and diverging interests within the context of the interpretation of the notion of “class interests” at the sanction stage.","PeriodicalId":174628,"journal":{"name":"English Law: Business (Topic)","volume":"56 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131440933","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Animosity towards the business of finance is ancient and persistent. Because finance creates intangible value, its contribution to society is still invisible to many observers – including former regulator Lord Turner, who described large swathes of the sector as ‘socially useless’. Such claims are unfounded and dangerous. Not only that, but the often-proposed remedy – increased statutory regulation – may heighten rather than mitigate the exposure of taxpayers and households to recessions and speculative bubbles. Financial firms serve many useful functions which individuals and households could scarcely undertake on their own. These functions include maturity transformation, matching lenders and borrowers at low cost, facilitating the transfer of risk and consumption across time and between people, monitoring, and diversification of investments. The best analogy for the financial sector is probably supermarkets. It would be possible to prepare dinner by visiting a chicken farmer to buy a chicken, a market gardener to buy a cabbage, and so on. But such a process would be very time-consuming and involve high opportunity costs. Banks reduce the transaction costs of financial activity, enabling people to spend their time more productively. Gross value added (GVA) by the UK financial sector amounted to £124 billion in 2016. Of this, 50 per cent is exported. Contrary to the claims of critics, the sales and trading activity which is alleged to be self-serving accounts at most for 10 to 13 per cent of financial services business in Britain. It is often argued that private-sector finance is short-term oriented. Whilst there is some evidence that shareholders may be heavily discounting distant profits, the reasons for this could be policy uncertainty and not irrationality as is commonly suggested. Moreover, the valuations of tech firms – whose positive cash flows lie far in the future – and low yields on corporate bonds suggest that investors are patient by historical standards. Much financial regulation is based on the notion that, in a free market, providers ‘dupe’ consumers. But regulatory intervention is often grossly miscalculated. The Financial Conduct Authority’s recent interest cap on payday loans shrank the market by between three and five times more than the regulator expected. Markets are not perfect, but regulation is often a very poor substitute. The much-cited literature linking financial growth and adverse economic outcomes is simply too crude to warrant drawing clear policy conclusions. Studies linking financialisation with inequality are similarly ambiguous: the top ten countries for their share of finance in GDP are a mixture of high-, medium- and low-inequality countries. Complex financial instruments and speculation, both unpopular in the wake of the 2008 crash, are not harmful on their own. In fact they help to transfer risks to those who can best bear it, whilst giving greater income certainty to vulnerable peo
{"title":"Socially Useless? The Crucial Contribution of Finance to Economic Life","authors":"P. Booth, Diego Zuluaga","doi":"10.2139/ssrn.3853681","DOIUrl":"https://doi.org/10.2139/ssrn.3853681","url":null,"abstract":"Animosity towards the business of finance is ancient and persistent. Because finance creates intangible value, its contribution to society is still invisible to many observers – including former regulator Lord Turner, who described large swathes of the sector as ‘socially useless’. \u0000 \u0000Such claims are unfounded and dangerous. Not only that, but the often-proposed remedy – increased statutory regulation – may heighten rather than mitigate the exposure of taxpayers and households to recessions and speculative bubbles. \u0000 \u0000Financial firms serve many useful functions which individuals and households could scarcely undertake on their own. These functions include maturity transformation, matching lenders and borrowers at low cost, facilitating the transfer of risk and consumption across time and between people, monitoring, and diversification of investments. \u0000 \u0000The best analogy for the financial sector is probably supermarkets. It would be possible to prepare dinner by visiting a chicken farmer to buy a chicken, a market gardener to buy a cabbage, and so on. But such a process would be very time-consuming and involve high opportunity costs. Banks reduce the transaction costs of financial activity, enabling people to spend their time more productively. \u0000 \u0000Gross value added (GVA) by the UK financial sector amounted to £124 billion in 2016. Of this, 50 per cent is exported. Contrary to the claims of critics, the sales and trading activity which is alleged to be self-serving accounts at most for 10 to 13 per cent of financial services business in Britain. \u0000 \u0000It is often argued that private-sector finance is short-term oriented. Whilst there is some evidence that shareholders may be heavily discounting distant profits, the reasons for this could be policy uncertainty and not irrationality as is commonly suggested. Moreover, the valuations of tech firms – whose positive cash flows lie far in the future – and low yields on corporate bonds suggest that investors are patient by historical standards. \u0000 \u0000Much financial regulation is based on the notion that, in a free market, providers ‘dupe’ consumers. But regulatory intervention is often grossly miscalculated. The Financial Conduct Authority’s recent interest cap on payday loans shrank the market by between three and five times more than the regulator expected. Markets are not perfect, but regulation is often a very poor substitute. \u0000 \u0000The much-cited literature linking financial growth and adverse economic outcomes is simply too crude to warrant drawing clear policy conclusions. Studies linking financialisation with inequality are similarly ambiguous: \u0000the top ten countries for their share of finance in GDP are a mixture of high-, medium- and low-inequality countries. \u0000 \u0000Complex financial instruments and speculation, both unpopular in the wake of the 2008 crash, are not harmful on their own. In fact they help to transfer risks to those who can best bear it, whilst giving greater income certainty to vulnerable peo","PeriodicalId":174628,"journal":{"name":"English Law: Business (Topic)","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114397920","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The reselling of tickets for events has a long history, dating back at least to Roman times. Such secondary markets in tickets are no different from other kinds of secondary market, and serve the same purpose: to correct flaws in the initial primary market. In recent years, new technology has led to the appearance of many new players in this market. Most of these are facilitating platforms rather than being directly involved as buyers or sellers of tickets. This market is fragmented with no firm having more than a very small part of the total secondary ticket market. That market itself is still small compared to the general market for tickets but is growing rapidly. This has led to many calls for limitations on ticket resale and, in particular, for what are effectively price caps. These arguments are wrongheaded and would disrupt an effective market. The more fundamental or underlying objections to secondary ticket markets are simply rejections of the principles of trade and a refusal to accept the reality of scarcity. It is the primary market for tickets that is dysfunctional. The secondary market is correcting its defects, so that tickets get into the hands of those who value them most. We are probably moving towards a new kind of market in tickets.
{"title":"Digital Resellers: The Case for Secondary Ticket Markets","authors":"S. Davies","doi":"10.2139/ssrn.3853709","DOIUrl":"https://doi.org/10.2139/ssrn.3853709","url":null,"abstract":"The reselling of tickets for events has a long history, dating back at least to Roman times. Such secondary markets in tickets are no different from other kinds of secondary market, and serve the same purpose: to correct flaws in the initial primary market. In recent years, new technology has led to the appearance of many new players in this market. Most of these are facilitating platforms rather than being directly involved as buyers or sellers of tickets. This market is fragmented with no firm having more than a very small part of the total secondary ticket market. That market itself is still small compared to the general market for tickets but is growing rapidly. This has led to many calls for limitations on ticket resale and, in particular, for what are effectively price caps. These arguments are wrongheaded and would disrupt an effective market. The more fundamental or underlying objections to secondary ticket markets are simply rejections of the principles of trade and a refusal to accept the reality of scarcity. It is the primary market for tickets that is dysfunctional. The secondary market is correcting its defects, so that tickets get into the hands of those who value them most. We are probably moving towards a new kind of market in tickets.","PeriodicalId":174628,"journal":{"name":"English Law: Business (Topic)","volume":"41 4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-01-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129569981","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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