November 22, 2011
What Can You Say About The European Debt Crisis?
Posted by David Zaring

Something close to a plurality of corporate scholars are working on papers related to the financial crisis in the United States.  I think it is much less likely that we will see something similar with the potentially even more dramatic European financial crisis.  Here's why:

  • A lot of what is happening in Europe is politics and markets, not law.  For sovereign debt, lawyers put together the instruments, and creditors can in theory (but not in practice) sue on default.  Ditto for the credit default swaps.  But the decisions about whether to issue them, whether to buy them... those aren't legal decisions, they are market ones. And they are the ones of interest in the crisis.
  • Similarly, the decision to bail out Greece isn't a matter of a European agency acting creatively.  Instead, every member of the EU passed a law permitting a bailout.  Again, there's not much to chew on there in terms of administrative law.
  • Of course, it isn't like there is no law to apply.  What the EU and the ECB do is governed by law ... but that's European law, it's hard, and I doubt American academics will have much to say about it.
  • There are some questions of interest, of course.  Consider MF Global’s bankruptcy filing, which has some stuff on how its exposure to European debt wasn’t working for its regulators or Moody’s.  Might be something interesting there for lawyers.  But generally, I'm not holding my breath.
  • I predict the sovereign debt experts in the academy - your Gulatis and your Gelperns - will have plenty of wisdom to impart, by the way.  But that's only a smidge of the corporate law academy, rather than, like, most of it.

Europe, European Union, Financial Crisis, Financial Institutions | Bookmark

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