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Financialisation and the vanishing of the rule of law
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Florence : European University Institute, 2023
EUI; LAW; PhD Thesis
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SEDANO VARO, Elena, Financialisation and the vanishing of the rule of law, Florence : European University Institute, 2023, EUI, LAW, PhD Thesis - https://hdl.handle.net/1814/75293
Abstract
How did we end up with an economy that fuels the gap between the privileged and the rest while bypassing the negative externalities that boost financial instability? In the context of escalating wealth inequalities, the role played by law in the construction of markets and its discontents has become a recurrent theme. Building upon qualitative empirical research in the EU banking sector, this thesis describes the role of the law in underpinning an overgrown financial leverage that ultimately nourishes the gap between the rich and the poor. This instrumentalization of the law corresponds with a market thinking paradigm that was unleashed by the Chicago School of Economics in the 1960s. But most notably, the market thinking has provoked two important changes in the law. First, this thesis argues that, in line with a tendency to embrace data-driven methods, EU financial law has adopted a deterministic approach towards complex questions that lie outside the legal system itself. In the post-2007/2008 world, EU law is increasingly evidence-based and responds to technical demands coming from outer systems (in the present case, from economics) rather than to legal principles or ethical customs. Second, this thesis describes how this technocratic turn results in deviations from the rule of law. This rule of emergency does not happen by accident. It benefits wealthy households that, thanks to market thinking, see their companies grow into big oligopolies that have the power to produce sophisticated knowledge with which they seize the responsive governance framework. The thesis concludes that, by revisiting market thinking through legal morality, financial governance can aspire to rebalance the market-society equilibrium, thus restoring the rule of law and dwindling inequalities.
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Defence date: 3 February 2023
Examining Board: Prof. Hans-W.Micklitz, (European University Institute, Supervisor); Prof. Katharina Pistor, (Columbia Law Schools); Prof. Mathias Siems, (European University Institute); Prof. Chiara Zilioli, (European Central Bank)
Examining Board: Prof. Hans-W.Micklitz, (European University Institute, Supervisor); Prof. Katharina Pistor, (Columbia Law Schools); Prof. Mathias Siems, (European University Institute); Prof. Chiara Zilioli, (European Central Bank)
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Chapter 4 'European supervisory authorities, financial standards and value' of the PhD thesis draws upon an earlier version published as chapter 'Technical standards and CoCo bonds : a new avenue for civil liability' (2020) in the book 'Financial regulation and civil liability in European law'.