Harmonizing European Union Bank Resolution: Central Clearing of OTC Derivative Contracts Maintaining the Status Quo of Safe Harbors

This Article argues that safe harbors for financial contracts should not be expanded in Europe, but instead should be repealed, as suggested by some commentators in the United States. At the very minimum, credit derivatives, swaps, and repurchasing agreements should be subject to a stay, and the resolution authorities in the Member States should have the power to assume beneficial contracts and to reject other unfavorable contracts. Also, the power of resolution authorities to transfer derivative positions in full or in part should not be sanctioned in favor of a full transfer. Rather, resolution authorities should have the power to cherry pick individual contracts for transfers after determining any potential systemic risk involved. In addition, it is essential to grant resolution authorities clear avoidance powers, specifically the power to avoid preferential transfer prior to bankruptcy. A pre-bankruptcy transfer could be exempted if made in the ordinary course of business. Without the extension of the avoidance powers, counterparties will simply move for contract termination, set off, and close-out at a time prior to bankruptcy

Constitutionalism of the European Union: Judicial Legislation and Political Decision-Making by the European Court of Justice

The focus of this article shall be the case law of the European Court of Justice. Despite recent proposals as well as other actions of the Member States to reform the Community Treaties, the expansion of judicial review by the European Court of Justice remains the driving force behind the development of constitutionalism of the European Union. In fact, the European Court of Justice and its case law play the most dominant and consistent role in the integration process. In doing so, the case law of the Court of Justice in part reflects the judicial activism comparable to early U.S. Supreme Court assertions of federal power. With the doctrines of direct applicability, direct effect, supremacy of Community Law, fundamental rights, and implied powers, the Court of Justice indicates a bias toward deeper European integration and centralized governance. To be sure, the establishment and subsequent elaboration of these doctrines provide a primary example for the role of the European Court of Justice in the European Union. The precedents of the Court, which in many cases were initiated by the Member States themselves or a direct result of their failure to comply with obligations under the Treaties, prove a consistent reliance on the Court to regulate political conflict throughout the European integration process. But aside from its role in European integration, it should also be noted that the activism of the European Court of Justice as an international court may provide general insight into the greater picture of international jurisprudence. That is, the possible influence of international jurisdiction on the sovereignty of nation-states bound by international agreements and international organizations

Personal Guarantees and Sureties between Commercial Law and Consumers in the United States

Guaranties and suretyships reduce the risk of default and today remain essential arrangements in many commercial and consumer transactions. A guarantor or surety promises to pay for the debt of a third party and may become primarily liable on that debt. Despite the significance of such a promise and the resulting obligation, U.S. law does not clearly distinguish between a guarantor and surety in a consumer or commercial context. This is of particular relevance, because in a consumer context a guaranty often has a gratuitous or sentimental element and a guarantor may not always be fully aware of the risks and liabilities involved with a guarantee promise. U.S. law generally considers guaranties and suretyships simply as third-party beneficiary contracts to which common law contract principles apply. This, in turn, makes guaranties and suretyships primarily a state law concern, resulting in significant differences of suretyship laws among all U.S. jurisdictions. As such, the U.S. lacks a uniform body of law in this area and makes consumer protection in a guaranty and suretyship context perfunctory at best

The Allocation of Powers in the European Union: A Closer Look at the Principle of Subsidiary

In the first section this article examines the different meanings of subsidiarity, its character as a doctrine of social philosophy and the origins of the concept of subsidiarity in the Community Treaties. The second section of this article describes the community approach to application, interpretation and review of compliance with subsidiarity. In this context, the Principle of Proportionality and the procedural requirement to Show Sufficient Grounds are considered as tools for judicial review and first developments in the case law of the European Court of Justice are discussed. Finally, against the background of political economic theory, the article will highlight a number of contradicting perspectives and limitations within the Principle of Subsidiarity

Faculty Artist Recital: Christoph Henkel, Cello; Harold Gray, Piano; November 12, 1972

Centennial East Recital HallSunday EveningNovember 12, 19728:15 p.m

Contingent Capital in European Union Bank Restructuring

The uncoordinated reorganization and resolution of Systemically Important Financial Institutions in different countries pose many challenges. Contingent capital provides a viable alternative for the efficient restructuring and resolution of failing financial institutions. Contingent Capital provides a mechanism for internalizing banks’ failure costs and helps return distressed financial institutions to solvency. This article offers a comparative perspective on bank resolution and restructuring in the European Union, Switzerland, the United Kingdom and Germany and shows that Contingent Capital could play a substantial role in bank restructuring

Faculty Recital: Christoph Henkel, Cello; Francoise Regnat, Piano; November 12, 1971

Centennial East Recital HallFriday EveningNovember 12, 19718:15 p.m

Faculty Recital: Christoph Henkel, Cello; Harold Gray, Piano; July 5, 1972

Centennial East Recital HallWednesday EveningJuly 5, 19728:15 p.m