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1 Law & Fin. Mkt. Rev. 1 (2007)

handle is hein.journals/lawfinancmr1 and id is 1 raw text is: Editorial First Issues This is our first issue, so a preliminary word about why we are here seems appropriate. Every journal probably thinks it is filling a gap in some way but we suffer from no delu- sions as to the presence of competition in the banking/ financial law field. We just want to take a slightly different approach. The name of our publication gives at least some of the game away. We do not want to focus only on what some call financial law (or even financial markets law). We want to explore the relationship between law and the func- tioning of the financial markets. This means that, for example, in addition to legal developments affecting how transactions are carried out, the laws on such things as extra- dition and various aspects of financial crime also interest us. Likewise, the implications of market practice and soft law developments. Organisations are expected to observe and comply with much more than just the law. Codes of conduct and practice, various kinds of regulatory pronouncement and promulgation, and the collective wisdom of professional, trade and industry bodies have an effect that can be indistinguishable from hard law. Such things have a direct impact on the behaviour of market participants and merit careful analysis and consideration. Our approach results in an extensive agenda. We are not limited to developments in English law, nor are we bound by any preconceived requirements for any kind of geographical balance. We want to look at law's role in serving an expanding, international market. Addressing issues jurisdic- tion by jurisdiction remains, of necessity, the norm, but for how much longer? Whichever jurisdiction you may call home, your appreciation of how your laws work can only be improved if you have some idea of how they do it in other places. And looking at issues across jurisdictions may help us see the direction we should be taking to deal with the more complex issues to which the law still does not supply a satisfactory answer. Changes in the law are inevitable and may be thrust upon us for a variety of reasons. Market participants do not always greet reform proposals with open arms. The markets' desire for certainty in the law is well known and understood but we also need to understand when and why reforms might be necessary, whether in mature or transitional jurisdictions. Market innovation in some areas tends to set such a cracking pace that the law gets left behind - with predictable legal risk consequences. If it works, don't fix it can be a dangerous policy, especially in the absence of clear case law. We value highly contributions to our journal from market participants (and are delighted that Allen & Overy, Clifford Chance and Lovells are supporting our update service, with Herbert Smith adding a general regulatory update with effect from the next issue). But we also value contributions from academics who are expert in the various fields we cover (and their contributions are peer-reviewed).' We plan to feature interviews with leading lawyers and others in addition to conventional articles. Lord Woolf's observations in this issue provide a fascinating perspective on how a body like the Financial Markets Law Committee helps to make the rela- tionship between the law and the markets work properly. His remarks on the rule of law also find echoes in our daily press. Last month, two quality London papers expressed concerns in lead editorials about the rule of law in both the UK and Russia in the space of a single week. This is not an issue of interest only to legal philosophers. (In both cases the politics of the situation were such that relations with major trading and security partners were perceived to be threatened.) As this issue goes to press, the papers are reporting on a range of issues that we confidently predict will be with us for some time to come. In what circumstances, for example, should a bank be held responsible when a corporate customer collapses leaving many individuals out of pocket and facing a disap- pointing Christmas because their savings have been swallowed up in the insolvency process? Is this a case of breach of existing duty, a shortcoming in the law, an attempt to find a deep-pocket fall-guy or just plain hard luck? Will banks ever be able to avoid being sucked into responsibility for the misbehaviour of their customers? Regulatory issues, as ever, ride high. Is principles-based regulation (including TCF, or treat your customer fairly) the way of the future? Green issues and corporate social responsibility have also climbed the agenda. Are company directors facing an onslaught of speculative litigation by stakeholders as the new UK Companies Act provisions come into force? What exactly does corporate social responsibility mean for a financial insti- tution? Can the risks involved in such concepts be better managed? These are just a few of the themes that will continue to feature. The ever-expanding impact of EU legal reforms will remain a preoccupation. The bedding down of rescue culture reforms in insolvency law (and related attacks on the floating charge as a form of security) will also continue to generate interest. And then there is the role of lawyers them- selves. The Sarbanes-Oxley legislation in the United States was preceded by various comments from public figures to the effect that in the various well-known US corporate scandals, lawyers had usually been involved in drawing up documents and generally were present at the scene of the crime. Such guilt by association analysis is sometimes heard in the UK and elsewhere. Increasingly under scrutiny, rightly or wrongly, lawyers involved in advising on various kinds of financial transaction (whether in-house or in pri- vate practice) are, it seems, expected to take a degree of responsibility for the propriety of what is being done, to look out for warning signs, blow whistles, and generally be some kind of gatekeeper. The distinguished US aca- demic lawyer, John Coffee, in his recently published book Gatekeepers,2 defines the latter expression as connoting some form of outside or independent watchdog or monitor - someone who screens out flaws or defects or who verifies compliance with standards or procedures .3 Coffee bemoans the failure of gatekeepers such as lawyers, accoun- tants and rating agencies to function effectively in the case of Law and Financial Markets Review January 2007 1

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