There has been only limited discussion of the meaning and importance of financial law as a distinct legal or academic subject of examination despite the importance of financial markets and financial services in modern business and commercial relations. It is the opinion of the writer that this subject should be given separate and independent study at this time.

Financial law itself involves a number of separate but interrelated ideas and concepts which include finance, markets, money, payment and instruments or claims. While many of these have been studied or considered in their own terms, they have not been drawn together into any single complete or coherent examination or analysis. This also involves a number of separate areas of law (including specifically property, obligations, tort and restitution) which makes any examination from a single legal perspective more difficult. The subject also includes national or domestic as well as regional (and principally European) as well as international and comparative aspects and issues.

 

Finance law specifically is concerned with the creation, recognition and enforcement of private rights and remedies.  These are based on underlying contractual or other legal claims or choses in action. Financial Law more generally is involved with the nature and the efficient and stable operation of financial systems which form part of the larger economies on which all modern societies are based. This more specifically includes financial supervision and regulation and other measures to protect the stability of each of the markets and sub-markets involved and the financial system as a whole in the larger public or social interest. Financial institutions and markets carry out a number of key functions without which any form of trade or commerce and many other activities would be impossible or the discharge of legal obligation incapable of being effected. Financial Law, rather than Finance Law, then incorporates parallel series of private and public law and regulatory components which further interact and change over time.

 

Finance and financial markets have generated significant welfare gains although markets are inherently unstable and susceptible to crisis and collapse. The recent financial crises that have occurred in national and international financial markets between 2007 and 2010 have confirmed both the paramount importance but also innate vulnerability and instability of these markets and the market system. The crises followed an extended period of economic, industrial, technology and global expansion and advance which unfortunately culminated in the accumulation of a massive credit and debt stock with many assets being fundamentally mispriced. After a collapse in market confidence, the resultant contraction led to a correspondingly significant de-leveraging and restructuring of assets and claims across the globe. A number of initiatives were announced to attempt to correct the perceived deficiencies in financial market supervision, regulation and support. Whether this results in the fundamental changes in the nature and function of financial markets that many have called for, a range of more specific corrections will have to be made to the manner in which they operate and are managed over time.

 

The purpose of this section is to consider the nature and content of finance and financial law. This initially includes the specific ideas of finance, finance law, financial law, international financial law and European financial law. The history of finance and financial law is referred to briefly and the structure of financial law considered in further detail. This includes financial techniques or sources of finance, the classification of financial instruments and assets, financial institutions and markets, financial function and financial risk. The specific content of each of the various sub-areas of financial law is examined in further detail. The nature of financial stability is then examined more specifically in terms of financial risk and regulation with some provisional comments and conclusions being drawn by way of a financial close. 

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