Legal and Conduct Risk in the Financial Markets, 3rd Edition

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Legal and Conduct Risk in the Financial Markets, 3rd Edition

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This is the third edition of the only work to focus on the topic of legal risk, expanded in this edition to include much new material specifically on conduct risk. The book has been updated to take into account developments in the law and professional standards concerning such risks and associated values in the context of the financial markets.

Significant (and in some cases, endemic) conduct-related scandals, such as the widespread mis-selling of financial products and LIBOR manipulation, exposed (even precipitated) by the Financial Crisis, have resulted in legal and regulatory change in equal measure (and profound effect) to that of the prudential and financial stability concerns captured in the second edition. Consequently this new edition fully examines the current approach to trust, ethics and conduct within the broader framework of reputational and legal risk. In doing so, it clarifies what constitutes legal risk in contemporary financial markets and how to manage it, drawing on examples and case studies.

Other developments in areas such as the resolution/insolvency of banks, the revision of the UK regulatory structure from the FSA to the FCA and PRA, and the recently made new crime of reckless management of a bank are all considered in full. There is also discussion of trends in areas ripe for development such as fiduciary duty amongst financial markets participants.

Combining practical emphasis with theoretical depth, this is an approachable and engaging reference guide to this important and evolving area of law.
Introduction
Part 1: The General Context
1: Why Legal Risk is Important: a Short History
2: Risk and Capital
3: Legal Risk in the London Market
4: The Global Context
5: The Law-maker, the Regulator and Current Preoccupations
Part 2: The Global Financial Crisis of 2007-9
6: Market and Regulatory Failure
7: The Initial Impact of the Crisis on the Financial Markets
8: Legal and Regulatory Responses to the Crisis in the UK
9: Response to the Crisis by the EU and Elsewhere
10: The Legal Risk Implications of the Crisis
Part 3: The Impact of Globalisation
11: Legal Risk in a Globalising Financial Market
12: Social Responsibility and Governance
13: The Role of International and Multilateral Institutions in Financial Law Reform
Part 4: Early Perceptions of Legal Risk
14: A Landmark Case and its Aftermath
15: A Case of Conceptual Impossibility
16: Settling Differences
Part 5: Characteristics of Legal Risk
17: Definition
18: Sources of Legal Risk
19: Causation
Part 6: Examples of Legal Risk
20: Property Interests in Indirectly Held Investment Securities
21: Vague Laws
22: Recharacterization
Part 7: Legal Risk Management
23: The Essentials of Legal Risk Management
24: Lawyers' Responsibility for the Management of Legal Risk
Part 8: Conclusions
25: A 'Risk-based Approach' to Law
Appendices
Roger McCormick, Visiting Professor, Senior Research Fellow and Director of the Law and Financial Markets Project at London School of Economics

Roger McCormick is a Senior Research Fellow, London School of Economics and Political Science and acts as a consultant on legal risk and related issues. He is also the director of the LSE Law and Financial Markets Project and the Editor of the Law and Financial Markets Review. He is a former partner of a major international law firm and has practised law in the City of London (with a brief spell in Paris) for nearly 30 years
"This is essential reading for every banking and corporate lawyer and it is an absolute must for anyone involved in setting out rules or guidelines in the management of legal risk...Overall this book represents a significant contribution in this complex area of law." - Gabriel Gómez Giglio, Journal of International Banking Law and Regulation.

"The book is stimulating and informative. There is reference to almost every conceivable aspect of the recent financial crisis, from its origins to the legal and regulatory responses in the UK and elsewhere." - Matteo Solinas, Edinburgh Law Review