Seminar: From the financial to the sovereign-debt crisis: Changing patterns of public and private law.
Presented by Prof. Giulio Napolitano and Prof. Andrea Zoppini, chaired by Prof. John Armour.
Summary
In 2008, the financial crisis erupted and governments were asked to solve it. Only two years later, a sovereign-debt crisis emerged and governments tried to save themselves and to provide financial assistance to one another, based on the solidarity principle. Governments are now facing extraordinary challenges and transformations, but the direction towards which they are moving is difficult to assess. Outputs are not moving in a unilateral direction, as they were in the 1980s and in the 1990s, because distrust in government now comes immediately after a market failure.
Changes both in external and in internal boundaries have affected five fundamental issues, namely the relationships between: 1) national countries and the European Union; 2) the executive branch and parliament; 3) politicians and bureaucrats; 4) central and local governments; 5) public and private sectors. The image of a continuously swinging pendulum is perhaps the one that best reflects the transformations occurring in the public law realm within the European context. But the output in institutional terms is much more difficult to assess. A different idea of public law must be developed to better understand all the transformations.
At the same time, a different idea of private law must be developed.
Before the 2008 financial crisis, we thought that the market and private binding contracts were totally autonomous, so that self-regulation was enough. The idea of private law was based on a mark-to-market model: the best regulatory device for situations where no market transactions were available was to mimic a market approach.
We now understand that this approach was an ideological output and that, on the contrary, we need a regulatory approach to private transactions when the aggregate effect of these transactions may have relevant effects on the economic cycle. As examples, it is sufficient to think of the normative restrictions on short-selling, or the problem concerning the regulation of private loans.
Biographies
Giulio Napolitano is professor of Public Law at the Faculty of Political Science at the University of Roma Tre. He has published extensively on both private and public law. He is a Member of the Steering Committee of the EGPL - European Group of Public Law - and co–editor of Economics of Services and Law and Policies of European Union. He is a Visiting Scholar at the Max-Planck-Institut für ausländisches öffentliches Recht und Völkerrecht di Heidelberg and he has spent time as a Program Affiliate Scholar at the School of Law, New York University.
Andrea Zoppini is Professor of Law at the Faculty of Law at the University Roma Tre. In this academic year, he holds courses in Private Law, Economic Analysis of Law (“Franco Romani” Chair, sponsored by the Bank of Italy) and
International Business Contracts (completely held in English). He studied at the Universities of Cambridge and Heidelberg; he was visiting scholar at Yale Law School (1994-1995) and New York University (2000). His scientific activity is mainly focused on Private and Commercial Law, with particular interest in the comparative, European, and Law & Economics fields. He is qualified at the Court of Appeals. Since 2006 he has been legal advisor for the Presidency of the Council of Ministers of the Italian Government; he is also consultant to the Italian Ministry of the Economy and for the Bank of Italy. He has been a member of the Strategic Committee for the Italian financial centre. Among the Commissions on which he has served as a member are the Commission for the Reform of Italian Corporate Law, the Commission for the Reform of the Law Protecting Personal Savings and the Commission for the Reform of Italian Bankruptcy Law. He is also a member of the Network of Stakeholder Experts on the Common Frame of Reference (CFR-net), instituted at the European Commission. He was Professor of Private Law and Private Comparative Law at the University of Sassari (1998-2001). He writes for the Italian newspaper “Il Sole 24 Ore” on themes mainly connected with Commercial Law.
John Armour was appointed to the Lovells Professorship in Law and Finance, in association with Oriel College on 1 July 2007, having previously been a University Senior Lecturer in Law and Fellow of Trinity Hall at Cambridge University. He studied law (MA, BCL) at the University of Oxford before completing his LLM at Yale Law School and taking up his first post at the University of Nottingham. He has held visiting posts at various institutions including Pennsylvania Law School, the University of Bologna, and Columbia Law School. He has published widely in the fields of company law, corporate finance, and corporate insolvency. His main research interest lies in the integration of legal and economic analysis, with particular emphasis on the impact on the real economy of changes in the law governing insolvency and company law. He has been involved in policy related projects commissioned by the Department of Trade and Industry, the Financial Services Authority, and the Insolvency Service.