3. Fintech and Market-Based Financing

It is worth considering also the conclusions of Buchak, G. and Matvos, G. and Piskorski, T. and Seru, A. 2017. “Fintech, Regulatory Arbitrage, and the Rise of Shadow Banks”, NBER Working Paper no 23288, March.

This research moves from the approach suggested by Alpa, G. 1981. “Raccolta di informazioni, protezione dei dati e controllo degli elaboratori elettronici (in margine ad un progetto di convenzione del Consiglio d’ Europa)” Il foro italiano, 1981, fasc. 2, pt. 5, p. 27 ff.

It is worth recalling Choi, B. 2019. “What is the Social Trade-off of Securitization? A Tale of Financial Innovation”. SSRN Research Paper no. 3440653, where the author shows that securitization allows banks to increase the asset size while sacrificing the rate of return per unit of assets. The author also tries to demonstrate that the availability of securitization increases the resilience against banking sector breakdowns and increases the size of credit booms associated with a subsequent breakdown. Indeed, a calibrated version of the model illustrates that an optimal regulation on the incentives of securitization can make the availability of securitization socially beneficial.

See Gissler, S. and Narajabad, B. 2018. “Supply of Private Safe Assets: Interplay of Shadow and Traditional Banks” SSRN Research Paper no. 3132058; the authors show that the creation of private safe assets by shadow banks can crowd out traditional banks’ supply of safe assets. In addition, these authors find out that “banks use FHLB borrowing as a perfect substitute for deposit financing” and that “the substitution of safe debt with FHLB borrowing does not go along with an overall increase in the balance sheet and therefore has no lending effect”. So, if shadow banks create safe assets at the expense of traditional banks’ deposits, then there will be a minimal effect on the total funding available for households and firms from banks and shadow banks.

See also Gebauer, S. and Mazelis, F. 2019. “Macroprudential Regulation and Leakage to the Shadow Banking Sector” DIW Berlin Discussion Paper No. 1814, which developed a DSGE model that differentiates between regulated, monopolistically competitive commercial banks and a shadow banking system that relies on funding in a perfectly competitive market for investments.

It is also worth recalling Geronimo, R. S. Q. 2017. “Why Long-Term Debt Instruments Cannot Be Deposit Substitutes” Lexkhoj International Journal of Criminal Law, Volume II, Issue II, because this paper situates the function of deposit substitutes within the context of shadow banking, where said instruments originated and are generally used. To show the incompatibility between a deposit substitute and a long-term debt instrument, the paper applies the fundamental theory of bond values.

In addition, see Gissler, S. and Ramcharan, R. and Yu, E. 2019. “The Effects of Competition in Consumer Credit Markets” SSRN Research Paper no. 3170996; the authors show that banks and non-banks respond differently to increased competition in consumer credit markets. According to the Authors, non-banks change their credit policy when faced with more competition and expand credit to riskier borrowers at the extensive margin, resulting in higher default rates.

See Tan, Y. 2017. “The Impacts of Competition and Shadow Banking on Profitability: Evidence from the Chinese Banking Industry” North American Journal of Economics and Finance, p. 89 ss., which tested the impacts of competition and shadow banking on bank profitability using a sample of 100 Chinese commercial banks over 2003–2013 with 417 and 395 observations.

See Buchak, G. and Matvos, G. and Piskorski, T. and Seru, A. 2018. “The Limits of Shadow Banks” Columbia Business School Research Paper No. 18-75 on the types of activities that migrate to the shadow banking sector.

It is useful to recall Zaccaria, R. 1982 “Diritto all’informazione e riservatezza” Il diritto delle radiodiffusioni e delle telecomunicazioni, fasc. 3, p. 527 ff. that represents the role of self-regulation in the management of news and information.

It is worth considering Frame, W. S. and Wall, L. D. and White, L. J. 2018. “Technological Change and Financial Innovation in Banking: Some Implications for Fintech” FRB Atlanta Working Paper No. 2018-11, which described the role of the financial system in a modern economy and how technological change and financial innovation can affect social welfare.

See also Gomber, P. and Kauffman, r. J. and Parker, C. and Weber, B. 2017. “On the Fintech Revolution: Interpreting the Forces of Innovation, Disruption and Transformation in Financial Services” Journal of Management Information Systems, which focused on the issues with respect to investments, financial markets, trading, risk management, robo-advisory and related services that are influenced by blockchain and fintech innovations.

See Chatterjee, S. and Jobst, A. A. 2019. “Market-Implied Systemic Risk and Shadow Capital Adequacy” Bank of England Working Paper No. 823 on a forward-looking approach to measure systemic solvency risk using contingent claims analysis (CCA) as a theoretical foundation for determining an institution’s default risk based on the uncertainty in its asset value relative to promised debt payments over time. Indeed, this market-implied valuation approach (‘shadow capital adequacy’) endogenizes bank solvency as a probabilistic concept based on the perceived default risk (in contrast to accounting-based prudential measures of capital adequacy).

In addition, we recall Packin, N. G. 2018 “Regtech, Compliance and Technology Judgment Rule” Chicago-Kent Law Review on the relevance of the human error, whose consideration are extendable to the human error of programmers and coders.

See Zhu, S. H. and Pykhtin, M. 2007. “A Guide to Modeling Counterparty Credit Risk”. GARP Risk Review with respect to a proposal for modelling credit exposure and pricing counter-party risk. They focus on two main topics: modelling credit exposure and pricing counter-party risk. It is important to recall they define credit exposure at contract and counter-party levels, introduce netting and margin agreements as risk management tools for reducing counter-party-level exposure and present a framework for modelling credit exposure. In the part devoted to pricing, they will define credit value adjustment (CVA) as the price of counter-party credit risk and discuss approaches to its calculation.

It refers to the approach of McGuire, P. M. and von Peter, G. 2016. “The Resilience of Banks’ International Operations” BIS Quarterly Review March 2016 applied in documenting post-crisis changes in the structure of BIS reporting banks’ global operations across bank nationalities.

See Garcia, J. A. 2012. “Who’s Afraid of the Shadows?—EU Moves to Curb Emerging Threats from Shadow Banking” Financial Regulation International; the author highlighted that “regulators and policy makers are facing a daunting task of calibrating a set of rules that covers in a sensible fashion the various components of the shadow banking system. It is laudable that EU policy makers and regulators recognise the important role the shadow banking system performs in the wider financial system and that framing the appropriate response may turn out to be a long conquest”.

See Beltratti, A. and Stulz, R. M. 2009. “Why Did Some Banks Perform Better during the Credit Crisis? A Cross-Country Study of the Impact of Governance and Regulation” Fisher College of Business Working Paper No. 2009-03-012, which investigated whether bank performance is related to bank-level governance, country-level governance, country-level regulation, and bank balance sheet and profitability characteristics before the crisis.

See Cave, J. 2016. “Regulation by and of Algorithms” SSRN Research Paper no. 2757701, which raised a set of challenges to regulation: “First, it suggests that detailed data aggregated and centralized may not provide adequate oversight over dispersed actors; indeed, modern data analytics is becoming decentralized and even less transparent as a result. Second, it means that ‘incidental’ aspects of communication and computation system performance (like latency or attenuation) may seriously interfere with the performance of automated sensing and decision systems, and that this in turn may change the intensity and pattern of communications through networks. Third, it means that regulatory relationships, by which individual actors are held responsible decisions or outcomes, may no longer provide effective governance”. In brief, it is worth considering that this paper analysed the growing importance of interacting systems of algorithms for communications networks and, through them, for a set of domain-specific examples, and then it developed “proposals for structural or ‘macro-prudential’ monitoring and regulatory mechanisms to apply to algorithmic systems and identifies some principles that can usefully be developed when designing automated or algorithmic approaches to the regulation of human behavior”.

Let us recall Bavoso, V. 2019. “The Promise and Perils of Alternative Market-Based Finance: The Case of P2P Lending in the UK” Journal of Banking Regulation leads “to critically evaluate the initiatives launched by the UK FCA, initially under the Innovation Hub, and more recently under the consultation for a new regulatory framework”.

See Khalil, S. K. and Saffar, W. and Trabelsi, S. 2013. “Disclosure Standards, Auditing Infrastructure, and Bribery Mitigation” Canadian Academic Accounting Association; the authors investigate the impact of disclosure standards and auditing infrastructure on firm-level corruption, and find that firms are less likely to grant gift to secure a government contract in countries having more extensive financial reporting requirements and countries where audit firms face a higher litigation and sanction risk.

See DiLorenzo, V. 2009. “Mortgage Market Deregulation and Moral Hazard: Equity Stripping Under Sanction of Law” St. John’s Legal Studies Research Paper No. 09-0179, which examines the failure of the current regulatory structure to adequately protect consumers against risks in a home mortgage lending market characterized by complexity and limited transparency. In particular, he explores “the reliance of bank regulators, particularly the Federal Reserve Board, on market discipline to control risks and the failure of market discipline” and “the Federal Reserve’s view that market intervention is only justified based on net societal benefits”. This is recalling a viewpoint that prevented regulatory intervention until the financial sector was in crisis, and a viewpoint that is at odds with the view of the Congress.

See Grody, A. D. 2018. “Can a Globally Endorsed Business Identity Code be the Answer to Risk Data Aggregation?” Journal of Risk Management in Financial Institutions, which describes the implications of new regulatory mandates on the technology and data management infrastructure underpinning risk management systems, within single financial enterprises and across multiple financial institutions and financial market utilities.

See Dempsey, M. J. 2000. “Ethical Finance: An Agenda for Consolidation or for Radical Change?” Critical Perspectives on Accounting, Vol. 11, p. 531 ff., on the possibility that corporate and financial ethics do not exist ‘to do good’, but rather to act reflexively to consolidate and sanction internal activity, with the consequence that the employee is called on to be ethical not on the individual’s own terms, but on the profit-motivated terms of the institution. In the end, profit remains as the bottom line.

It is worth bearing in mind Moohr, G. S. 2003. “An Enron Lesson: The Modest Role of Criminal Law in Preventing Corporate Crime” Florida Law Review, Vol. 55, No. 4, 2003, which pointed out that the rational choice model presumes that would-be criminals rationally calculate the risks and benefits of criminal conduct, which implies that increasing criminal sanctions is an effective prevention tool. But as the conduct at Enron shows, personal characteristics of executives, such as judgement biases and excessive optimism, can impair the capacity to calculate accurately the risk of punishment.

See Pollack, M. 2007. “A Listener’s Free Speech, a Reader’s Copyright” Hofstra Law Review, Vol. 35, p. 1457 ff., which highlights that, besides the US Supreme Court’s continuing reluctance to burden speakers and authors for the benefit of listeners and readers, several existing doctrines offer possible routes to at least partial solutions. The A. summarized that “the Court still makes the analytical error … That error is reinforced by a similar misstep in copyright theory. Nevertheless, with creativity, some media reform is possible”. See also Barron, J. A. 1967 “Access to the Press—a New First Amendment Right”, Harvard Law Review p. 1641 ff).

It is also useful to recall Levy, J. 2011. “Towards a Brighter Fourth Amendment: Privacy and Technological Change” Virginia Journal of Law and Technology about the problem of technological change eroding privacy by developing a framework of bright line US Fourth Amendment rules.

It is worth considering that the trajectory of compliance expenditures over the past several decades may be traced to a good corporate citizenship movement in the mid-1990s, when the government proposed a public-private sector partnership to combat corporate crime, market manipulation and moral hazards of the bankers. See Sepe, M. 2019. “Abusi di mercato” in Manuale di diritto bancario e finanziario, p. 792 ff.

See also Laufer, W. S. 2018. “A Very Special Regulatory Milestone” University Pennsylvania Journal Business Law, p. 391 ff., which argued that the government hoped to overcome the near-insurmountable challenge of getting evidence of corporate wrongdoing, while shifting as much of the burden and costs of policing to the regulated. Then companies continue to justify making compliance expenditures in reasonably defensive ways to levels that are now unprecedented. Moreover, the author highlights that those who rail against overcriminalization or corporate criminal liability, more generally, miss speaking out against a one-sided regulatory strategy of compliance cost shifting that brings us to this historic milestone. Indeed, the threat of unfair and burdensome costs was never with the very rare event of corporate criminal liability. Rather, the threat came from firms taking the government’s bait that they needed to spend, and spend, and spend more.

Let us extend the above consideration to the whole sustainability of corporate; see Khan, M. and Serafeim, G. and Yoon, A. 2016 “Corporate Sustainability: First Evidence on Materiality” The Accounting Review, Vol. 91, no. 6, p. 1697 ff.

See Picker, R. C. 2008 “Competition and Privacy in Web 2.0 and the Cloud” University of Chicago Law & Economics Working Paper No. 414, which represented that “in the past, we have regulated intermediaries at these transactional bottlenecks—banks, cable companies, phone companies and the like—and limited the ways in which they can use the information that they see. Presumably the same forces that animated those rules—fundamental concerns about customer privacy—need to be assessed for our new information intermediaries. In doing that, we need to be acutely aware of how our choices influence competition.”

It recalls Mülbert, P. O. 2010. “Corporate Governance of Banks after the Financial Crisis—Theory, Evidence, Reforms” ECGI – Law Working Paper No. 130/2009 on the links among risk management, board composition and executive remuneration.

See Bebchuk, L. A. and Spamann, H. 2010. “Regulating Bankers’ Pay” Georgetown Law Journal, Vol. 98, No. 2, p. 247 ff., which show that “corporate governance reforms aimed at aligning the design of executive pay arrangements with the interests of banks’ common shareholders—such as advisory shareholder votes on compensation arrangements, use of restricted stock awards, and increased director oversight and independence -cannot eliminate the identified problem. In fact, the interests of common shareholders could be served by more risk-taking than is socially desirable”.

It is useful to recall Santos, J. A. C. 2000. “Bank Capital Regulation in Contemporary Banking Theory: A Review of the Literature” BIS Working Paper No. 90.

See Alpa, G. 1985. “Il diritto dei computers”. Informatica e diritto, fasc. 1, p. 53 ff., which focused on the relevant interests of the regulators for such reality.

See Ivashina, V. and Becker, B. 2011. “Cyclicality of Credit Supply: Firm Level Evidence” Harvard Business School Finance Working Paper No. 10-107, which shows “close link between bank credit supply and the evolution of the business cycle” and the reason for its regulation.

It recalls Alpa, G. 1998. “Aspetti della disciplina sui dati personali riguardanti gli enti e l’attività economica” Rivista trimestrale di diritto e procedura civile, 1998, fasc. 3, p. 713 ff., where the author delves into the aspect of the discipline concerning the processing of personal data (i.e. Italian Law 675/1996) which concerns the effects of the new discipline on “entities” and on the exercise of economic activities. The Italian legislator, in fact, has included in the protection also the “entities”, both for profit and non-profit, both public and private, and economic operators, both public and private, individual entrepreneurs or collectives.

See Coffee, J. C. 2007. “Law and the Market: The Impact of Enforcement” Columbia Law and Economics Working Paper No. 304, which shows that the “variable of relative enforcement intensity explains the greater financial development of countries with common law origins or is instead the product of that differential in development remains open to question and depends on the direction of causality”. In addition, the author examines several explanations and prefers the hypothesis that enforcement intensity is a product of the level of retail ownership in the jurisdiction, with a high level of retail ownership creating a political demand for greater enforcement.

It is useful to rely on the research of Haar, B. 2016. “Freedom of Contract and Financial Stability through the Lens of the Legal Theory of Finance” (LTF)—LTF Approaches to ABS, Pari Passu-Clauses, CCPs, and Basel III” SAFE Working Paper No. 141, on the influence of private law on financial markets.

A clear example is provided by Lu, L. 2018. “Shadow Banking for Cash-Strapped Entrepreneurs: A Study of Private Lending Agreements Under Chinese Contract Law” Journal of Business Law Issue 3, p. 216 ff., which shows one of the most popular commercial contracts in China: private lending agreement, and refers to moneylending arrangements between a business borrower and its debt investors.

See Scholz, L. 2017. “Algorithmic Contracts” Stanford Technology Law Review, which explains that “algorithmic contracts are contracts in which an algorithm determines a party’s obligations”. In this respect, the author represents that some contracts are algorithmic because the parties used algorithms as negotiators before contract formation, choosing which terms to offer or accept. Other contracts are algorithmic because the parties agree that an algorithm to be run some time after the contract is formed will serve as a gap-filler. Such agreements are already common in high-speed trading of financial products and will soon spread to other contexts. It is worth considering that this author concludes that “contract law doctrine does not currently have a coherent approach to describing the creation and enforcement of algorithmic contracts”.

Let us mention Kwon, O. and Tseng, K.C. and Bradley, J. and Tjung, L. C. 2010. “Forecasting Financial Stocks Using Data Mining” SSRN Research Paper no. 1566268, which presented a Business Intelligence (BI) approach to forecast daily changes in seven financial stocks’ prices from 1 September 1998 to 30 April 2008, with 267 independent variables, with the purpose of comparing the performance of Ordinary Least Squares model and Neural Network model in order to see which model better predicts the changes in the stock prices and to identify critical predictors to forecast stock prices to increase forecasting accuracy for the professionals in the market.

Let us recall the results of Armour, J. and Hansmann, H. and Kraakman, R. H. 2009. “Agency Problems, Legal Strategies, and Enforcement” Oxford Legal Studies Research Paper No. 21/2009, which maps legal similarities and differences across jurisdictions. According to these authors, some legal strategies are “regulatory” insofar as they directly constrain the actions of corporate actors: for example, a standard of behaviour such as a director’s duty of loyalty and care. Other legal strategies are “governance-based” insofar as they channel the distribution of power and payoffs within companies to reduce opportunism. For example, the law may accord direct decision rights to a vulnerable corporate constituency, as when it requires shareholder approval of mergers. Alternatively, the law may assign appointment rights over top managers to a vulnerable constituency, as when it accords shareholders—or in some jurisdictions, employees—the power to select corporate directors. Then, it is useful to consider the relationship between different enforcement mechanisms—public agencies, private actors and gatekeeper control—and the basic legal strategies outlined. This helps in concluding that regulatory strategies require more extensive enforcement mechanisms—in the form of courts and procedural rules—to secure compliance than do governance strategies. However, governance strategies, for efficacy, require shareholders to be relatively concentrated so as to be able to exercise their decisional rights effectively.

See Committee on the Global Financial System and Financial Stability Board. 2017. “FinTech credit: Market structure, business models and financial stability implications”. See also Annunziata F. 2018 “La disciplina delle trading venues nell’era delle rivoluzioni tecnologiche: dalle criptovalute alla distributed ledger technology” Orizzonti del diritto commerciale, 2018, fasc. 3, p. 40 ff.

It is worth to recall Pinna, A. and Ruttenberg, W. 2016. “Distributed Ledger Technologies in Securities Post-Trading Revolution or Evolution?” ECB Occasional Paper No. 172, with respect to the European approach.

In this respect, it is possible to recall the post-crisis approach to the topic mentioned above; see Corcoran, A. M., 2013. “International Standards for Central Counterparties and Replumbing the Financial System: Retrofitting Listed Derivatives Infrastructure for the Global OTC Derivatives Market” Futures and Derivatives Law Report; the author concluded his analysis by considering that as multiple national authorities are coping with bringing their settlement infrastructures into line with international benchmarks, national requirements and cross border measures based on equivalence, substituted compliance, deference and other criteria, the so-called Principles for Financial Markets Infrastructures are worthy of a second critical look. The author expressly refers to the fact that “both matters that were addressed and were not addressed by the international high-level look at market infrastructures have continuing importance”. Hence, he questions whether more attention should be paid to differentiating the risk methodologies applicable to complex and structured products that are not amenable to being effectively ‘futurized’.

See Mainelli, M. and Milne, A. K. L. 2016. “The Impact and Potential of Blockchain on the Securities Transaction Lifecycle”. SWIFT Institute Working Paper No. 2015-007, which reports the outcome of a series of interviews and focus group meetings with professionals working in post-trade processing and the provision of mutual distributed ledger services, in order to document views on the current research hypotheses about the potential impact of mutual distributed ledger technology on post-trade processing global securities markets.

Hence the possibility to highlight that the main questions refer to the appropriate access to mutual distributed ledger, the set-up of change as piecemeal or ‘big bang’, and the application of mutual distributed ledger in securities settlement. All these questions would require a regulatory response able to manage the major changes in business processes. This recalls the conclusions on litigation and settlement of Moffitt, M. L., 2009. “Three Things to Be Against (‘Settlement’ Not Included)—A Response to Owen Fiss” Fordham Law Review who recognize that settlement and litigation are no longer separate—in practice or in theory. According to the author, even if settlement and litigation are co-evolved symbiotic processes, to stand against one is to stand against the other.

See Caytas, J., 2016. “Developing Blockchain Real-Time Clearing and Settlement in the EU, U.S., and Globally” Columbia Journal of European Law: Preliminary Reference.

See Cerezetti, F. and Sumawong, A. and Shreyas, U. and Karimalis, E. 2017. “Market Liquidity, Closeout Procedures and Initial Margin for CCPs” Bank of England Working Paper No. 643, which “using the trade repository data available to the Bank (as a result of EMIR reporting) on over-the-counter interest rate swaps and ten years (i.e. 2005 to 2015) of information on related market risk factors, … derives empirically an efficient hedging strategy that minimizes the CCP’s risk exposure to a defaulting clearing member”. Thus, the author highlights that endogenous trade-off structures between total risk (market risk plus funding needs) and transaction costs are also established, with marginal sensitivities to individual components of the hedging strategy determined.

It is worth considering that supervisors reached the aforesaid conclusion, as confirmed by Barbagallo, C. 2019. “Fintech: ruolo dell’Autorità di Vigilanza in un mercato che cambia”. Bancaria, fasc. 1, p. 10 ff.

It refers to Irresberger, F and Bierth, C. and Weiss, J.N.F. 2016. “Size Is Everything: Explaining SIFI Designations”, Review of Financial Economics; the authors studied the determinants of the systemic importance of banks and insurers during the financial crisis. In particular, it is worth considering their investigation on the methodology of regulators to identify global systemically important financial institutions and find that firm size is the only significant predictor of the decision of regulators to designate a financial institution as systemically important. Further, using a cross-sectional quantile regression approach, they found that Marginal Expected Shortfall and ΔCoVaR—as two common measures of systemic risk—produce inconclusive results concerning the systemic relevance of banks and insurers during the crisis.

It refers also to the study of Wilmarth, A. E., 2011. “The Dodd-Frank Act: A Flawed and Inadequate Response to the Too-Big-To-Fail Problem” Oregon Law Review, p. 951 ff., whose proposals would strip away many of the public subsidies currently exploited by financial conglomerates and would subject them to the same type of market discipline that investors have applied over the past three decades in breaking up inefficient commercial and industrial conglomerates.

See also—on this topic—Lemma, V. 2016. “Too big to escape”. Rivista trimestrale diritto dell’economia, p. 45 ff; Lemma, V. 2015. “Too big to be popular”. “La riforma delle banche popolari”, Padova, p. 173 ff. and Brozzett., A. 2018. “‘Ending of too big to fail’ tra soft law e ordinamento bancario europeo. Dieci anni di riforme”, Bari.

See World Bank Group—International Monetary Fund, 2019. “Fintech: The Experience So Far” IMF Policy Paper, pp. 19–20 on the international cooperation efforts that are already underway. They noted “specific policy responses to fintech developments”. In particular country authorities’ have shared information with international financial institutions (IMF, WB, the Bank for International Settlements (BIS), etc.) or with other country authorities through international training and peer-learning programs.

See the Editorial Board of the Financial Times, US development finance needs urgent upgrading, in FT.com, 26 September 2018.

Sometimes, the contracts that underlie it can reflect the uncertainties and concerns arising from the instability of the capital market; however, it is not possible to admit agreements not adequate to support the challenges set by the changing taking place (and by the new centrality of banking compared to the recovery of the real economy); see Lemma, V. and Thorp, J. A. 2014. “Sharing Corporate Governance: The Role of Outsourcing Contracts in Banking” Law and Economics Yearly Review, Vol. 3, pt. 2, p. 357 ff.

In particular, Duflo, E. and Glennerster, R. and Kremer, M. R. 2006. “Using Randomization in Development Economics Research: A Toolkit” MIT Department of Economics Working Paper No. 06-36 provided a practical guide (a toolkit) for researchers, students and practitioners wishing to introduce randomization as part of a research design in the field.

It is worth considering that the above is in line with the considerations of Argentati, A. 2018. “Le banche nel nuovo scenario competitivo. Fin-Tech, il paradigma Open banking e la minaccia delle big tech companies” Mercato concorrenza regole, 2018, fasc. 3, p. 44 ff.

Let us recall Rodotà, S. 1991. “Protecting Informational Privacy. Trends and Problems”, Politica del diritto, 1991, fasc. 4, p. 521 ff. for the beginning of a route towards a redefinition of the concept of privacy and data protection in the perspective of an ‘open society’, assessing conflicting rights and interests.

It recalls Zaring, D. and Bignami, F. 2016. “Comparative Law and Regulation. Understanding the Global Regulatory Process”. Northampton, MA, USA, who relies on the consideration that “as regulation’s domain has expanded, the processes by which it is mad across the world have come under scrutiny. The constitutional anomaly of a system of policymaking in which the locus of power rests neither with elected politicians nor with courts, but with public officials in specialized administrative agencies and transnational networks, has given rise to a number of legal innovations designed to foster public accountability”.

Reference is made to Packin, N. G. 2013. “The Case Against the Dodd-Frank Act’s Living Wills: Contingency Planning Following the Financial Crisis” Berkeley Business Law Journal on the functioning of comprehensive contingency plans for reorganization or resolution of their operations, whose goal is to mitigate risks to the financial stability of the US and encourage last-resort planning, which will allow for a rapid and efficient response in the event of an emergency.

See Ferran, E. 2004. “European Banking Union: Imperfect, But It Can Work” University of Cambridge Faculty of Law Research Paper No. 30/2014 and in particular the consideration about an odd construction born of compromises and shaped to fit into legal territory bounded by EU Treaty constraints that cannot be adjusted in the current political environment, that can be repeated in the analysis of fintech.