EU fines are imposed on companies, not managers. Economically, they hit the shareholders. Yet, the shareholders have typically not participated in the company’s wrongdoings, and corporate law often cuts-off shareholders from management. This article submits that the Commission’s corporate fines thus disproportionately restrict shareholders‘ rights under the EU Charter of Fundamental Rights: As corporate fines are manifestly unsuitable to reach their purpose, hit the wrong and hence do not „strike the right balance“, they are incompatible with the Charter. The increased significance of shares for citizens’ personal financial autonomy and old age provision resulting from the ECB’s low interest policy and the EU’s mushrooming fine amounts corroborate this finding. Corporate fines, deterrent, purpose of corporate fines, shares, shareholders, fundamental rights, proportionality, suitability, restriction of rights, EU Charter of Fundamental Rights
{"title":"Systematically Flogging the Wrong: EU Corporate Fines Violate the Fundamental Rights of Shareholders – The European Commission as Revenant of the Persian Great King Xerxes","authors":"A. Reuter","doi":"10.54648/eulr2021024","DOIUrl":"https://doi.org/10.54648/eulr2021024","url":null,"abstract":"EU fines are imposed on companies, not managers. Economically, they hit the shareholders. Yet, the shareholders have typically not participated in the company’s wrongdoings, and corporate law often cuts-off shareholders from management. This article submits that the Commission’s corporate fines thus disproportionately restrict shareholders‘ rights under the EU Charter of Fundamental Rights: As corporate fines are manifestly unsuitable to reach their purpose, hit the wrong and hence do not „strike the right balance“, they are incompatible with the Charter. The increased significance of shares for citizens’ personal financial autonomy and old age provision resulting from the ECB’s low interest policy and the EU’s mushrooming fine amounts corroborate this finding.\u0000Corporate fines, deterrent, purpose of corporate fines, shares, shareholders, fundamental rights, proportionality, suitability, restriction of rights, EU Charter of Fundamental Rights","PeriodicalId":53431,"journal":{"name":"European Business Law Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42473313","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}
Despite several attempts to introduce corresponding legislation, the EU has not yet established rules governing company groups. Given the interest of the European Commission in this topic and the assumed benefits of a European group law, this paper proposes a new concept for a legally binding European group law. This paper aims to develop a proposal that is both, practicable for the parent company in the sense of an enabling law, and which simultaneously protects minority shareholders and creditors. The developed concept bases upon the term “management decisions”. These decisions include both instructions as well as decisions, which have an impact on the subsidiaries. The hereinafter-proposed concept suggests a distinction between subsidiaries with and without minority shareholders. A further distinction is made depending on whether the interests of the parent company and its subsidiaries are aligned or diverge. This results in eight basic constellations (1A to 4A and 1B to 4B). This paper proposes a possible regulatory framework for these constellations. Besides, a differentiation is made according to whether the management decision evidently results in a risk of insolvency for the company or merely reduces its creditworthiness. Within this framework, group solidarity poses an available option for company groups.
{"title":"European Group Law Reconsidered","authors":"Stefanie Jung, P. Krebs","doi":"10.54648/eulr2021022","DOIUrl":"https://doi.org/10.54648/eulr2021022","url":null,"abstract":"Despite several attempts to introduce corresponding legislation, the EU has not yet established rules governing company groups. Given the interest of the European Commission in this topic and the assumed benefits of a European group law, this paper proposes a new concept for a legally binding European group law. This paper aims to develop a proposal that is both, practicable for the parent company in the sense of an enabling law, and which simultaneously protects minority shareholders and creditors. The developed concept bases upon the term “management decisions”. These decisions include both instructions as well as decisions, which have an impact on the subsidiaries. The hereinafter-proposed concept suggests a distinction between subsidiaries with and without minority shareholders. A further distinction is made depending on whether the interests of the parent company and its subsidiaries are aligned or diverge. This results in eight basic constellations (1A to 4A and 1B to 4B). This paper proposes a possible regulatory framework for these constellations. Besides, a differentiation is made according to whether the management decision evidently results in a risk of insolvency for the company or merely reduces its creditworthiness. Within this framework, group solidarity poses an available option for company groups.","PeriodicalId":53431,"journal":{"name":"European Business Law Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45771783","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 paper endeavours to ascertain how Islamic banking may operate within the Italian legal system, given that neither the Rome I regulation, and the incorporation approach cannot be applied. There are three main research questions: i) which is the mainstream Western approach to Islamic banking?; ii) if Sharia rules are considered as a system of social rules and Islamic banking is compared to ethical banking or socially responsible banking, to which extent the Italian banking law is applicable to?; iii) can we suggest building up Sharia rules as a system of normative prescriptions? Globalization, Islamic banking, Sharia, Italian banking law, money, potential capital, usus, legal system, general clauses, lex mercatoria
{"title":"Globalization and the Growth of Islamic Banking: The Authorization Process in Italy","authors":"Gabriela Gimigliano","doi":"10.54648/eulr2021023","DOIUrl":"https://doi.org/10.54648/eulr2021023","url":null,"abstract":"This paper endeavours to ascertain how Islamic banking may operate within the Italian legal system, given that neither the Rome I regulation, and the incorporation approach cannot be applied. There are three main research questions: i) which is the mainstream Western approach to Islamic banking?; ii) if Sharia rules are considered as a system of social rules and Islamic banking is compared to ethical banking or socially responsible banking, to which extent the Italian banking law is applicable to?; iii) can we suggest building up Sharia rules as a system of normative prescriptions?\u0000Globalization, Islamic banking, Sharia, Italian banking law, money, potential capital, usus, legal system, general clauses, lex mercatoria","PeriodicalId":53431,"journal":{"name":"European Business Law Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42262469","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 present paper aims to contribute to the solution of the problem of sustainable financing for agricultural enterprises. Farmers face new challenges: the bureaucratization of public and private funding, the risk of over-debt in case of natural adverse events. Intelligent use of blockchain in loan agreements with assistance from trade associations and insurance for pecuniary losses due to adverse events can be an answer. Bank, Credit, Agriculture, Financial resilience
{"title":"Credit in Agriculture: In the Perspective of Banking Law, Financial Market Law and Insurance Law","authors":"Sara Landini","doi":"10.54648/eulr2021028","DOIUrl":"https://doi.org/10.54648/eulr2021028","url":null,"abstract":"The present paper aims to contribute to the solution of the problem of sustainable financing for agricultural enterprises. Farmers face new challenges: the bureaucratization of public and private funding, the risk of over-debt in case of natural adverse events. Intelligent use of blockchain in loan agreements with assistance from trade associations and insurance for pecuniary losses due to adverse events can be an answer.\u0000Bank, Credit, Agriculture, Financial resilience","PeriodicalId":53431,"journal":{"name":"European Business Law Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49223595","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 paper examines the recent developments in the field of business crisis management, with a focus on the European and US legal cultures. The main argument is the need for a consistent framework between insolvency and competition law in the theory of the firm. The present analysis reveals the need for a proper balance between the principle of competition on the merits and the philosophy of business-rescue in order to avoid dysfunctions in the application of insolvency and antitrust statutes. After an overview of the main contact cases between the two disciplines, the article addresses the main lawmakers’ responses to this problem. In this context, the regulation on banking crises management represents a first attempt to strike a proper balance between the (apparently compelling) goals underlying insolvency and competition law. This article aims at providing some guidance for a systematic reading of the two disciplines. Moving from a holistic understanding of the theory of the firm, it suggests assigning competition law a pivotal role in order to pursue efficiency in the market and consistency in legal theory. Investment funds, reserved AIFs, share classes, fair treatment, seniority privilege, minimum interest privilege, non-contagion principle, preferential treatment, shift of wealth
{"title":"Insolvency, Competition, and the Theory of the Firm","authors":"Vitorio Minervini","doi":"10.54648/eulr2021026","DOIUrl":"https://doi.org/10.54648/eulr2021026","url":null,"abstract":"The paper examines the recent developments in the field of business crisis management, with a focus on the European and US legal cultures. The main argument is the need for a consistent framework between insolvency and competition law in the theory of the firm. The present analysis reveals the need for a proper balance between the principle of competition on the merits and the philosophy of business-rescue in order to avoid dysfunctions in the application of insolvency and antitrust statutes. After an overview of the main contact cases between the two disciplines, the article addresses the main lawmakers’ responses to this problem. In this context, the regulation on banking crises management represents a first attempt to strike a proper balance between the (apparently compelling) goals underlying insolvency and competition law. This article aims at providing some guidance for a systematic reading of the two disciplines. Moving from a holistic understanding of the theory of the firm, it suggests assigning competition law a pivotal role in order to pursue efficiency in the market and consistency in legal theory.\u0000Investment funds, reserved AIFs, share classes, fair treatment, seniority privilege, minimum interest privilege, non-contagion principle, preferential treatment, shift of wealth","PeriodicalId":53431,"journal":{"name":"European Business Law Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46037094","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}
{"title":"Book Review: Min Yan Beyond Shareholder Wealth Maximisation: Towards A More Suitable Corporate Objective for Chinese Companies","authors":"Junhai Liu","doi":"10.54648/eulr2021021","DOIUrl":"https://doi.org/10.54648/eulr2021021","url":null,"abstract":"","PeriodicalId":53431,"journal":{"name":"European Business Law Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42032788","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 examines whether the evolution of company narrative reporting based on section 172 UK Companies Act 2006 can be characterised as reflexive law, which preserves the balance between utilitarian company law shareholder value approach and the corporate responsibility demands by society; thereby mediating between semi-autonomous sub-systems of company law and social responsibility. It discovers an evolving process in company law, which has some indications of reflexive law and governance within self-imposed limits of non-interference in ‘private’ spheres of governance. The result is progressive in scope but incapable of delivering radical normative shift in company law towards stakeholder responsibility. Company law, company reporting, reflexive law, reflexive governance, social responsibility.
{"title":"Reflexive Law and Section 172 Reporting: Evolution of Social Responsibility within Company Law Limits?","authors":"A. Okoye","doi":"10.54648/eulr2021018","DOIUrl":"https://doi.org/10.54648/eulr2021018","url":null,"abstract":"This article examines whether the evolution of company narrative reporting based on section 172 UK Companies Act 2006 can be characterised as reflexive law, which preserves the balance between utilitarian company law shareholder value approach and the corporate responsibility demands by society; thereby mediating between semi-autonomous sub-systems of company law and social responsibility.\u0000It discovers an evolving process in company law, which has some indications of reflexive law and governance within self-imposed limits of non-interference in ‘private’ spheres of governance. The result is progressive in scope but incapable of delivering radical normative shift in company law towards stakeholder responsibility.\u0000Company law, company reporting, reflexive law, reflexive governance, social responsibility.","PeriodicalId":53431,"journal":{"name":"European Business Law Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49048699","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 Regulation on European Crowdfunding Service Providers (ECSPs) for businesses, since its Proposal by the European Commission in March 2018, has experienced difficult trilateral negotiations. The length of the legislative process relates not only to nationalism resurgence, uncertain Brexit negotiations and COVID-19 outbreak but also to different views about crowdfunding and its optimal regulation within the three European Institutions. The present paper, after describing crowdfunding’s main features, will critically analyze the ECSPs Regulation in details as eventually adopted in October 2020, also in comparison with the alternative options available and their relative implications, in order to discuss the resulting picture of crowdfunding and its future under the new European regime, also providing suggestions for certain adjustments. Bank resolution, insolvency, significant non-financial enterprises, enterprise groups, Carillion, early intervention, recovery and resolution planning, living wills, public interest, systemic risk, critical functions.
{"title":"The European Crowdfunding Service Providers Regulation: The Future of Marketplace Lending and Investing in Europe and the ‘Crowdfunding Nature’ Dilemma","authors":"E. Macchiavello","doi":"10.54648/eulr2021020","DOIUrl":"https://doi.org/10.54648/eulr2021020","url":null,"abstract":"The Regulation on European Crowdfunding Service Providers (ECSPs) for businesses, since its Proposal by the European Commission in March 2018, has experienced difficult trilateral negotiations. The length of the legislative process relates not only to nationalism resurgence, uncertain Brexit negotiations and COVID-19 outbreak but also to different views about crowdfunding and its optimal regulation within the three European Institutions. The present paper, after describing crowdfunding’s main features, will critically analyze the ECSPs Regulation in details as eventually adopted in October 2020, also in comparison with the alternative options available and their relative implications, in order to discuss the resulting picture of crowdfunding and its future under the new European regime, also providing suggestions for certain adjustments.\u0000Bank resolution, insolvency, significant non-financial enterprises, enterprise groups, Carillion, early intervention, recovery and resolution planning, living wills, public interest, systemic risk, critical functions.","PeriodicalId":53431,"journal":{"name":"European Business Law Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46740369","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 provides an account of how the Covid-19 outbreak and its impact on the banking sector were tackled in the European Union. The Covid-19 crisis is the first economic crisis after the enactment of the regulatory reforms of the last decade and represents the first relevant test for the assessment of their effectiveness in particular in the Eurozone. The analysis focuses specifically on the new framework for Banking Supervision in the Euroarea, the Single Supervisory Mechanism within the Banking Union, and explains how ECB Banking Supervision reacted to the economic and financial shock generated by the Covid-19 outbreak until the end of 2020. In this context, the article discusses the ECB’s policy interventions within the wider European and international context where also significant initiatives from the central bank side of the ECB, the European Commission, the European Banking Authority, the European Systemic Risk Board, the EU co-legislators and the Basel Committee on Banking Supervision took place.1 The Article also analyses the potential limitations of the existing European framework for crisis management, should a further severe shock with new waves of infections and lockdowns require extraordinary policy interventions. The article is divided into 4 sections: section A sets the scene and briefly describes the unprecedented economic shock deriving from the outbreak of the virus followed by the various measures of containment and lockdown. Section B analyses the various policy initiatives taken by ECB Banking Supervision to tackle the crisis within the wider European and international context. Section C discusses the potential use of the European framework for crisis management in the banking sector, should a further severe economic shock with ample repercussions on the banking sector materialise. Section D concludes. European Banking Supervision, Covid-19, microprudential supervision, macroprudential supervision, distribution restrictions, usable capital, crisis management framework, precautionary recapitalisation, non-performing loans, asset management company
{"title":"Of Viruses, Economic Crises and Banks: The European Banking Union and the Response to Covid-19","authors":"Giovanni Bassani","doi":"10.54648/eulr2021016","DOIUrl":"https://doi.org/10.54648/eulr2021016","url":null,"abstract":"This article provides an account of how the Covid-19 outbreak and its impact on the banking sector were tackled in the European Union. The Covid-19 crisis is the first economic crisis after the enactment of the regulatory reforms of the last decade and represents the first relevant test for the assessment of their effectiveness in particular in the Eurozone. The analysis focuses specifically on the new framework for Banking Supervision in the Euroarea, the Single Supervisory Mechanism within the Banking Union, and explains how ECB Banking Supervision reacted to the economic and financial shock generated by the Covid-19 outbreak until the end of 2020. \u0000In this context, the article discusses the ECB’s policy interventions within the wider European and international context where also significant initiatives from the central bank side of the ECB, the European Commission, the European Banking Authority, the European Systemic Risk Board, the EU co-legislators and the Basel Committee on Banking Supervision took place.1 The Article also analyses the potential limitations of the existing European framework for crisis management, should a further severe shock with new waves of infections and lockdowns require extraordinary policy interventions.\u0000The article is divided into 4 sections: section A sets the scene and briefly describes the unprecedented economic shock deriving from the outbreak of the virus followed by the various measures of containment and lockdown. Section B analyses the various policy initiatives taken by ECB Banking Supervision to tackle the crisis within the wider European and international context. Section C discusses the potential use of the European framework for crisis management in the banking sector, should a further severe economic shock with ample repercussions on the banking sector materialise. Section D concludes.\u0000European Banking Supervision, Covid-19, microprudential supervision, macroprudential supervision, distribution restrictions, usable capital, crisis management framework, precautionary recapitalisation, non-performing loans, asset management company","PeriodicalId":53431,"journal":{"name":"European Business Law Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47946640","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}
A clear trend is evolving as more and more banks and other financial institutions are being successfully sued before the civil courts of the Netherlands for breaches of their special duty of care (‘bijzondere zorgplicht’). Whereas it was initially mainly banks that had reason to worry about claims for damages based on a breach of the special duty of care, other financial institutions too are now having to take the possibility of such claims very seriously. Another factor is that the special duty of care owed by financial institutions now seems to apply not only in their dealings with retail clients but also in relation to non-retail clients that need protection. The author discusses the main developments relating to the special duty of care, leading to a consideration of how things may evolve in the future. Banks, financial institutions, MiFID (Directive 2004/39/EC), MiFID II (Directive 2014/65/EU), conduct-of-business rules, duty of care, product governance, product intervention, mistake, error, contract law, tort law, Dutch Civil Code, Unfair Contract Terms Directive (Directive 93/13/EEC), nudging, FinTech, sustainable finance, mass damage
{"title":"The Future of the Special Duty of Care in the Financial Sector – Perspectives from the Netherlands","authors":"D. Busch","doi":"10.54648/eulr2021017","DOIUrl":"https://doi.org/10.54648/eulr2021017","url":null,"abstract":"A clear trend is evolving as more and more banks and other financial institutions are being successfully sued before the civil courts of the Netherlands for breaches of their special duty of care (‘bijzondere zorgplicht’). Whereas it was initially mainly banks that had reason to worry about claims for damages based on a breach of the special duty of care, other financial institutions too are now having to take the possibility of such claims very seriously. Another factor is that the special duty of care owed by financial institutions now seems to apply not only in their dealings with retail clients but also in relation to non-retail clients that need protection. The author discusses the main developments relating to the special duty of care, leading to a consideration of how things may evolve in the future.\u0000Banks, financial institutions, MiFID (Directive 2004/39/EC), MiFID II (Directive 2014/65/EU), conduct-of-business rules, duty of care, product governance, product intervention, mistake, error, contract law, tort law, Dutch Civil Code, Unfair Contract Terms Directive (Directive 93/13/EEC), nudging, FinTech, sustainable finance, mass damage","PeriodicalId":53431,"journal":{"name":"European Business Law Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41516192","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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