Legal and Conduct Risk in the Financial Markets

Legal and Conduct Risk in the Financial Markets

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Description

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.
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Product details

  • Hardback | 704 pages
  • 177 x 252 x 43mm | 1,346g
  • Oxford, United Kingdom
  • English
  • Revised
  • 3rd Revised edition
  • 0198749279
  • 9780198749271
  • 1,219,204

Table of contents

Introduction
Part I: The General Context
1: Why Legal and Conduct Risk are Important: a Short History
2: Risk And Capital
3: Legal and Conduct Risk in the London Market
4: The Global Context
5: The Lawmaker, the Regulator, and Current Preoccupations
Part II: The Financial Crisis of 2007-2009
6: Market and Regulatory Failure
7: The Initial Impact of the Financial Crisis on Financial Markets
8: The Initial Legal and Regulatory Responses to the Financial Crisis in the UK
9: The Initial Response to the Financial Crisis by the EU and Elsewhere
Part III: The Conduct Crisis
10: The Impact of the LIBOR Scandal: Concerns about Misconduct & Findings of the Conduct Costs Project
11: Sustainability, Responsibility, Public Trust, Ethical Drift and the 'Social Licence' Concept
12: Ethics & Banking Standards
Part IV: Early Perceptions of Legal Risk
13: Financial Services Act 2012: Changes to Regulatory Architecture
14: Financial Services (Banking Reform) Act 2013
15: Individual Accountability
16: General Legal and Conduct Risk Implications of the Crises and Regulator-led Redress
Part V: Legal and Conduct Risk In Interconnected Financial Markets
17: Legal and Conduct Risk in a Globalizing Financial Market
18: The Role of International Institutions in Financial Law Reform
19: Brexit
Part VI: Early Perceptions of Legal Risk
20: A Landmark Case and its Aftermath
21: A Case of Conceptual Impossibility
22: Settling Differences
Part VII: Characteristics of Legal Risk
23: Definition
24: Sources of Legal Risk
25: Causation
Part VIII: Examples of Legal Risk
26: Property Interests in Indirectly Held Investment Securities
27: Vague Laws
28: Recharacterization
Part IX: Legal and Conduct Risk Management
29: The Essentials of Legal and Conduct Risk Management
30: Lawyers' Responsibility for the Management of Legal and Conduct Risk
31: Metrics in Conduct Risk and Reputational Management: Predictions and Perception
32: Managing the "Grey Areas"; Standards, Scenario Analysis and Case Studies
Part X: Conclusions
33: A Convergence of Agendas
Appendices
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Review Text

Review from previous edition The first to wrestle legal risk to the floor, McCormick speaks in an eminently reassuring voice. Solicitors are problem solvers, and McCormick has engaged a (considerable) problem, observed its characteristics, mapped its watering holes, and made very sensible suggestions for keeping the beast at bay. Joanna Benjamin, Journal of International Banking Law and Regulation (JIBLR), 2007, issue 2
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Review quote

This financial crisis highlights the importance of the work by McCormick, daring because not even the financial markets understand the legal risks involved, and few lawyers, if any, would really understand the complexity of all the financial products. The book is therefore useful to policymakers, lawyers, and finanacial actors, besides academics. * Journal of Risk and Insurance * An excellent and insightful examination of legal risk in financial markets written by an experienced senior practitioner in the field. This work is a major contribution to legal risk management, and full of sound and sensible advice. A pioneering and perceptive work. The second edition has illuminating chapters on the recent financial crisis and its implications for legal risks * Philip Wood, Head, Allen & Overy Global Law Intelligence Unit * It is.... a book that every finance lawyer should read before starting his or her career." "This is an essential read 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. * William Johnston, IBA Legal Practice Division Newletter, Dec 2006 * 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 Gomez 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 * Of the many admirable qualities of the book, perhaps the most admirable is its approach. [...] What it does do is provide a toolkit using which (sic) both lawyers and non-lawyers can begin to approach each other and to develop a mutual understanding. * Simon Gleeson, JIBLR, 2006, issue 8 * The book enters a number of familiar doctrinal debates, including charge-backs, property interests in indirectly held securities, changes on book debts. The technical difficulty of these is so great, and the controversy surrounding them so intractable that, generally speaking, the more one reads, the more lost one becomes. McCormick's gift is...to see doctrine as a resource and not as a burden. He is able to pick out the few essential propositions, and suggest a
sensible way forward (saving all of us a lot of time). * Joanna Benjamin, JIBLR, 2007, issue 2 * Review from previous edition The first to wrestle legal risk to the floor, McCormick speaks in an eminently reassuring voice. Solicitors are problem solvers, and McCormick has engaged a (considerable) problem, observed its characteristics, mapped its watering holes, and made very sensible suggestions for keeping the beast at bay. * Joanna Benjamin, Journal of International Banking Law and Regulation (JIBLR), 2007, issue 2 *
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About Roger McCormick

Roger McCormick is a past Director of the Sustainable Finance Project at London School of Economics and Political Science, and a past Visiting Professor at LSE. He is now the Managing Director of CCP Research Foundation .He retired from full-time private legal practice in 2004, having practised law in the City of London for nearly thirty years.


Chris Stears is a solicitor, a fellow of the Chartered Institute for Securities & Investment, Research Director at CCP Research Foundation, and principal and general counsel at Medius Consulting.
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