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

BK:9778353

Wreck of Medusa

BK:9778353

BK:9778353

1. Map: Key map of jurisdictions

BK:9778353

Money, banks and capital markets What are they for?

BK:9778353

Drivers of law dominance

DemographyGDP growthGlobalisationRate of change

BK:9778353

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

BK:9778353

GDP growth

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

BK:9778353

17. Map: GDP per capita

BK:9778353

BK:9778353

GDP 1990s: 3 FOOTBALL FIELDS

US Europe Japan & Asia 4 All others

The Great Divide (from 1830)

BK:9778353

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

BK:9778353

Million: 1,000,000

Billion: 1,000,000,000

Trillion: 1,000,000,000,000

BK:9778353

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

BK:9778353

56. Map: Bank insolvencies 1980-2002

BK:9778353

53. Map: State insolvency 1980-2005

BK:9778353

The triple polarisation(from 1830+)

BK:9778353

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

BK:9778353

2. SuperMap: Global jurisdictions

BK:9778353

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

BK:9778353

Rate of change of law

Contrast 1830- Codification- Companies

- Banks- Capital market

Therefore, bankruptcy

BK:9778353

54. Map: Financial regulatory regimes

BK:9778353

44. Map: Corporate insolvency rescue statutes

BK:9778353

43. Chart: Corporate insolvency rescue statutes

BK:9778353

Risk mitigants

Insolvency set-off and nettingTrusts

Security interests

BK:9778353

20. Map: Close-out netting on insolvency

BK:9778353

39. Supermap: The trust

BK:9778353

28. Supermap: Global security interests

BK:9778353

Other issues

Debtors or creditors?Protections for individuals

Regulatory and legal micromanagement

BK:9778353

2 models of legal systems

Therefore: conflicts …

Dark

Light

BK:9778353

Venus in shell

BK:9778353

Delaware factor

Delaware corporationsISDA master agreementUCP 600SwiftDTC

But……..COMI

BK:9778353

Future role of financial lawyers

Law firms/in-house departments

Emerging jurisdictions

BK:9778353

89. Chart: Complexity of phenomena

BK:9778353

BK:9778353

Conclusions

BK:9778353

Hierarchy of legal needs

BK:9778353

Hierarchy of economic needs