What is Systemic Risk and what can be done about it? A Legal Perspective

Abstract

The global financial crisis challenges scholars from across many different disciplines to think about causes, immediate consequences and long term responses from the perspective of their particular disciplinary standpoint. This paper focuses on one particular response to the landscape and architecture of financial regulation that results from the lessons about the need to better recognise and counter risk to the financial system as a whole as opposed to its constituent parts and participants. One important policy response to the challenges posed by systemic risk has been the construction of the emergent macroprudential regulatory agenda that is now beginning to take root in practical forms and institutional architecture within the global, European and national spaces within which norms, standards and laws operate. It is argued here that this emerging agenda will challenge lawyers and legal systems more than may be being currently imagined.