future of financial law - of financial law.pdfphilip r wood special global counsel, allen &...

PREDICTIONS FOR THE FUTURE OF FINANCIAL LAW AND LAWYERS

By Philip R Wood

Philip R WoodSpecial Global Counsel, Allen & Overy LLP

Visiting Professor in International Financial Law, University of OxfordYorke Distinguished Visiting Fellow, University of CambridgeVisiting Professor, Queen Mary College, University of London

Visiting Professor, London School of Economics & Political Science

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Wreck of Medusa

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1. Map: Key map of jurisdictions

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Money, banks and capital markets What are they for?

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Drivers of law dominance

DemographyGDP growthGlobalisationRate of change

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Demography

1830 – 1 billion1930 – 2 billion (100 years)1960 – 3 billion (30 years)1977 – 4 billion (17 years)1990 – 5 billion (13 years)2000 – 6 billion (10 years)2030 – 8 billion

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GDP growth

1830 – 700 billion (Australia and South Korea)1977 – 16,000 billion2000 – 37,000 billion2030 – 97,000 billion

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17. Map: GDP per capita

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GDP 1990s: 3 FOOTBALL FIELDS

US Europe Japan & Asia 4 All others

The Great Divide (from 1830)

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GDP 2030: 10 FOOTBALL FIELDS

China China

Japan and Asia Japan and Asia

US

Europe & offshoots

India Latin America Former USSR Africa

Europe & offshoots

US

China

23

19

17

15

10 6 3 3

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Million: 1,000,000

Billion: 1,000,000,000

Trillion: 1,000,000,000,000

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Payment systems: 30 x world GDPFX: 25 x world GDPMarket cap: World GDPDTC/Euroclear: 25/12 trillionDerivatives: 300 trillion

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56. Map: Bank insolvencies 1980-2002

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53. Map: State insolvency 1980-2005

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The triple polarisation(from 1830+)

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10. Superchart – World Financial Law (1)Five key indicators 1975

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2. SuperMap: Global jurisdictions

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42. Map: Major changes to insolvency legislation 1997-2007

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Rate of change of law

Contrast 1830- Codification- Companies

- Banks- Capital market

Therefore, bankruptcy

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54. Map: Financial regulatory regimes

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44. Map: Corporate insolvency rescue statutes

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43. Chart: Corporate insolvency rescue statutes

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Risk mitigants

Insolvency set-off and nettingTrusts

Security interests

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20. Map: Close-out netting on insolvency

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39. Supermap: The trust

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28. Supermap: Global security interests

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Other issues

Debtors or creditors?Protections for individuals

Regulatory and legal micromanagement

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2 models of legal systems

Therefore: conflicts …

Dark

Light

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Venus in shell

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Delaware factor

Delaware corporationsISDA master agreementUCP 600SwiftDTC

But……..COMI

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Future role of financial lawyers

Law firms/in-house departments

Emerging jurisdictions

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89. Chart: Complexity of phenomena

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Conclusions

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Hierarchy of legal needs

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Hierarchy of economic needs