Chair in International Banking Law and Finance
(Currently on sabbatical semester 1)

PhD(LSE), LLM(LSE), LLB(Hons)(Ath.)
View my full research profile

Biography

Professor Emilios Avgouleas is the inaugural holder of the International Banking Law and Finance Chair at the University of Edinburgh and the founding director of the Edinburgh LLM in International Banking Law and Finance. He is a Member the Stakeholder Group of the European Banking Authority elected in the (so-called) 'top-ranking' academics section and an independent member of Eurogroup's select panel on Greek banking. 

He teaches strongly inter-disciplinary courses on banking law and finance, financial regulation, capital markets law, and the law and economics of corporate finance both at the PG and the UG level.

Emilios is an acknowledged expert on public policy and financial reform, financial market regulation, banking law and finance, and global economic governance. He has given keynote lectures, research seminars, and conference papers in a plethora of leading academic and public policy institutions including more recently the Bank of England, the European Parliament, the Basel Committee, the US Federal Reserve and Singapore Monetary Authority. He has published extensively in the wider field of International and European finance law and economics and behavioural finance. He is the author of a large number of scholarly articles and of two monographs: Governance of Global Financial Markets: The Law, the Economics, the Politics (Cambridge University Press, 2012); The Mechanics and Regulation of Market Abuse: A Legal and Economic Analysis (Oxford University Press, 2005). He has authored Part 1, chapters 1-5 of  Principles of Banking Law (Oxford University Press, 3rd ed., 2017)(the law & economics of Bank Regulation & Supervision). He co-authored & co-edited: Reconceptualizing Global Finance and its Regulation (Cambridge University Press, 2016).

Emilios' work has frequently been cited and commented upon in major Parliamentary and public policy reports, including  the UK Parliament's Enquiry on Banking Standards (which also adopted Emilios' conceptual definition of market abuse), EU Commission's Report on Short Selling, Australian Parliamentary Enquiry on Pensions, US Congress Inquiries, the House of Lords - EU Committee, the Irish Commission on Banking, as well as major think-tank and finance industry reports and submissions in major consultations on such diverse issues as banks and corporate disclosure regimes, long-term & sustainable equity markets, bank structural reform, and bank bail-ins. He is also often cited by the global media including the Financial Times, Bloomberg and the Wall Street Journal. 

During his sabbatical year 2016 Emilios held the following appointments: Senior Research Scholar Yale Law School (Spring), senior Visiting Scholar Harvard Law School (Fall), Vis. Professor and Centre of Banking Law Vis. Professor , National University of Singapore (Summer), dist. guest professor, MBA, Athens Univ. of Economics & Business (Winter).

Until 2008 Emilios practised extensively in the broader field of International and European financial law and structured finance. He worked as an Associate at the Derivatives and Financial Institutions Group of Clifford Chance LLP, as a Managing Associate at the Financial Markets Group of Linklaters, and as an equity partner at a large continental Law Firm.


Emilios sits on the editorial board of seven well known scientific journals and acts as a peer reviewer for the ERC, ESRC, Leverhulme Trust as well as the leading law journals: OJLS, MLR, etc. He also acts as an external examiner for parts of the LLM programmes of the LSE and Hong Kong University.

In addition to the EBA SG he is a member of the sovereign debt group of the Financial Markets Law Committee (operating under the auspices of the Bank of England), and a member Royal Economic Society (RES).

On occassion, he has advised governments, development organisations, and central banks on issues ranging from bank rescues to sovereign debt restructuring and financial stability and on issues of economic development and market integrity.

Emilios was before joining Edinburgh in January 2012 a University Professor of International Financial Markets and Financial Law at the University of Manchester.

 

CONFERENCES, SEMINARS, WORKSHOPS

Annual, Keynote, and Notable Lectures

“Long-Term Finance, Investment Incentives and Rescuing Capitalism”, University of Cambridge, Capitalism on Edge Lecture Series, 19 January 2017 (public lecture).

“The Financial Regulation Conundrum – Why We Should Discriminate in Favour of Long- Term Finance”, Wasserman Workshop in Law and Finance, Yale Law School, 19 October 2019.  http://ccl.yale.edu/emilios-avgouleas-chair-international-banking-law-and-finance-university- edinburgh-financial

“Central Banks, Financial Stability and Legal Liability – The Central Banking Contract” keynote address to the Banking and Financial Law Section (invited), Annual Conference of the Society of Legal Scholars, Oxford University, 6 September 2016.

“Monetary Policy, Financial Stability and the 'Holly' Grail of International Monetary Coordination - An Incomplete Framework or Chimaera?", keynote address to the Chinese University of Hong Kong conference: "The Political Economy of Financial Regulation", HK, 2- 4 June 2016. http://webapp1.law.cuhk.edu.hk/2016conference/10th/conf/participants.php

"The Complex Status of the European Securities and Markets Authority (ESMA) and its Promising Future under the Capital Markets Union" in the Bocconi University & Consob conference: "Il Sistema di Vigilanza Europeo Prospettive e problemi del ruolo", Bocconi, Milan, 30 May 2016

“From Speculative to Sustainable Finance – When Markets Do Good?”, Our Changing World, University of Edinburgh, annual lecture series, 17 November 2015. http://www.law.ed.ac.uk/other_areas_of_interest/events/all_events/from_speculative_finance _to_sustainable_finance_when_markets_can_do_good

“Regulating financial Innovation: multifaceted Challenge for Contemporary Economic and Regulatory Policy” in ‘Financial product governance in post-financial crisis Europe’, School of Law, 4-5 June 2015, European University Institute, Florence (framing lecture).

Van Ryn Annual Lecture, ‘Towards a Global Financial Law’, Brussels Global Law Week, The Perelman Centre, HEC Paris and the Centre Emile Bernheim of the Solvay Brussels School of Economics and Management, 22 May 2015. http://www.philodroit.be/IMG/pdf/call_-_yse_- _global_law_week_-_final_version_-_3.pdf

“Potential Systemic Risks in Asian Banking Sectors’ in ‘The Future of Banking and Financial Services Regulation& Implications for Asia”, Singapore Management University, School of Law, 27 February 2015 (keynote).

“Financing long-term growth and international financial centres: What role for institutions?” in the Shanghai Jiao Tong University, National University of Singapore, Hong Kong University conference: 'Asian Financial Centres’, Development and Regulation-- Comparative Study, Shanghai Jiao Tong University, 11-13 November 2014 (keynote). http://law.sjtu.edu.cn/Detail16894.aspx

Durham Castle Lecture: “How Can We Control the Forces of Doom Looming Over the Global Economy”, Durham Castle Lecture Series, University of Durham, 2013-4, 4 December 2013, Great Hall, Durham Castle. https://www.dur.ac.uk/multimedia/video/lectures/castle/

“Why Global Finance Needs an Institutional Big Bang? How it Can be Achieved?” presented at Adolf Berle Center, 4th International Symposium, 'Rethinking Financial/Securities Markets', University College London, Faculty of Laws and University of Seattle, June 2012 (framing lecture).

 

Select Academic and Public Policy Conference Presentations and Papers and Guest Seminars (invited and peer review)

 

“Converting Debt to Equity as a Means to Address TBTF” The Fourth Symposium on Ending Too Big to Fail, Minneapolis Federal Reserve Bank, USA, 26 September 2016, https://www.minneapolisfed.org/publications/special-studies/endingtbtf/symposiums/ending- too-big-to-fail-symposium-iv

“The Unexpected Financial Stability Consequences of Extra-Ordinary Monetary Measures and Quantitative Easing”, CEO panel, European Asset Management CEO Summit, the European Institute and the Institutional Investor Magazine, Cap Ferrat, France, 5 October 2016.

“The Many Facets of the Too-Big-to-Fail (TBTFS) Institution and the Challenge of Regulating TBTFs” Monetary Authority of Singapore (Central Bank, prudential and Capital Markets regulator of Singapore), General Counsel, Financial Stability, and Supervision Divisions, 11 August 2016.

“The Vexed Question of Effective Bank Resolution and the Challenge Posed by Bail-in Regimes”, Faculty of Law, National University of Singapore, 23 August 2016 http://law.nus.edu.sg/pdfs/cbfl/events/avgouleas_vqebrcpbr.pdf

“2016金融法系列讲座之十:The Lender of Last Resort and 21st Century Past and Future Crises”, Koguan Law School, Shanghai Jiao Tong University, 6 June 2016. http://law.sjtu.edu.cn/International/Detail18172.aspx

"Financial Product Governance and Liability under MiFID II", University of Niemegen Conference on MIFID II, 26 January 2016, Amsterdam.

 

“An Evaluation of ECB’s Role in the Eurozone and Challenges Ahead” in “ECB – Europe’s Unelected Government”, European Parliament conference, 14 January 2016, Brussels. http://www.guengl.eu/uploads/news-documents/ECB_Presentation1.pdf

“Liquidity vs Insolvency: False or Real Dichotomy”, panel discussion with Martin Hellwig, in the conference “Finance between Liquidity and Insolvency”, House of Finance (SAFE), Goethe University , 11 – 12 December 2015, Frankfurt am Main. http://safe- frankfurt.de/fileadmin/user_upload/editor_common/Events/2015_Haar/GLawFiN_SAFE_FRA _final_22_Nov-Logos.pdf

‘The Future of Fractional Reserve Banking: Is Jimmy Stewart Dead?’, Faculty of Law, University of Cambridge, 28 April, 2015. http://www.law.cam.ac.uk/press/events/2015/04/3cl- seminar-the-future-of-fractional-reserve-banking-in-light-of-recent-reforms-is-jimmy-steward- dead/2866

“Bank Resolution”, Seminar leader & presenter, (with Charles Goodhart) Bank of England, Financial Stability Directorate & bank Resolution Policy Unit, 11 February 2015, seminar organized by the BoE director of financial stability Sam Woods (now Head of the PRA 7 Deputy Governor of the BoE).

“Critical Reflections on Bank Bail-ins” in the biannual conference of the Basel Committee on Banking Supervision, ‘Banking and regulation: the next frontier’, Bank of International Settlements, 22-23 January 2015. http://www.bis.org/bcbs/events/bartnf/programme.pdf

‘A Critique of the NML Capital Ltd v Republic of Argentina and the Ensuing Saga regarding the Ambit of Pari Passu’, Financial Markets Law Committee, ‘Roundtable on Sovereign Debt’, Bank of England, 12 November 2014, chaired by Mr Justice Knowles.

“Free Movement of Capital in an Imperfect Monetary Union: Any Remedies?” In ‘Europe at the Crossroads: A Union of Austerity or Growth Convergence?’, Levy Economics Institute, Economia Civile, Ford Foundation, the Friedrich-Ebert-Stiftung, 21-22 November 2014. http://www.levyinstitute.org/conferences/athens2014/

‘The EU Movement of Capital Freedom and the Unity of Free Movement’, in the European Law Network, ‘The Constitutional Implications of Free Movement’, Department of Private Law, University of Oslo, 6-8 November 2014. http://www.jus.uio.no/english/research/networks/european-law-network/events/other- events/programme-6-8.nov.2014-final.pdf

'Governance Costs of Bank Leverage and the Boom in UK Housing Markets', in National Institute for Economic and Social Research(NIESR)/Economic and Social Research Council (ESRC)/Centre for Macroeconomics (CFM) ,Third Annual Finance conference "The Future of Housing Finance", Bank of England, 12 Sept.2014. http://www.centreformacroeconomics.ac.uk/pdf/Event-201409-NIESRHousing-

'How to Promote Transatlantic Regulatory Convergence' in EU-US Financial Regulation Dialogue, Brussels, 9 July 2014, http://www.qedcommunication.eu/eu-usfrd

'Bank Capital, Leverage Ratios, and Financial Stability' in the conference on European Banking Regulation of the Centre for Advanced Studies of the Ludwig Maximilians Universitat Munchen, 3-4 July 2014.

'The ECB beyond the Banking Union: the case for and the legality of a Euro-TARP' in conferencia Internacional 'European Banking Union: the new Regime" the Royal Institute (Elcano) and Universidad San Pablo, Madrid 28-29 April 2014.

'A Critical Evaluation of the Systemic and other Consequences of Bail-in centred bank recapitalisations' in the Wharton Business School and European University Institute Department of Economics conference 'Bearing the Losses from Bank and Sovereign Default in the Eurozone', Florence, 24 April 2014.

'Towards a New Perception of Systemic Risk', in the European University Institute Conference: 'Changing Paradigms after the Crisis: Social and Economic Perspectives' Robert Schuman Centre for Advanced Studies, The Global Governance Programme, Florence, 21 March, 2014.

'Costs and Benefits of the European Banking Union' Roundtable: A Banking Union for Europe, organized by the EABH and the Frankfurt School of Finance & Management, with the participation of ECB and Basel Directors and leading academics Frankfurt Am Main, 17 January 2014.

Closing Speaker in Law Commission for England and Wales, Scottish Law Commission, and Edinburgh Commercial Law Centre workshop: 'The Law Commission's Paper on Fiduciary Duties for Financial Intermediaries', 15 January 2014.

“Why and How Banks Became Too-big-to-Fail: Transactional Banking, Leverage and Financial Innovation” in the Hong Kong University, University of New South Wales, Edinburgh University Conference 'Reconceptualizing Global Finance', Hong Kong University, 13-14 December 2013. http://www.law.hku.hk/aiifl/documents/GlobalFinance-Flyerdd20Nov2013.pdf

“Beyond the Banking Union: The Possible and Desirable Role of the ECB in Resolving the Banking Crisis”, in the Levy Institute and Ford Foundation Conference: 'The Eurozone Crisis, Greece, and the Experience of Austerity', November 8-9, 2013, Athens International Conference Center.

“Cross-border Bank Restructuring and Resolution”, Joint Session of Banking Law and Insolvency Law Sections, International Bar Association, Annual Conference, Boston, 7-12 October 2013.

“State Intervention and Anglo-American Bank Regulation”, Opening Speech in 34th Annual Congress of Geselschaft fur Rechtsvergleichung (German Comparative Law Society), University of Marburg, 12 September 2013.

'Regional Financial Arrangements: Lessons from the Eurozone Crisis for East Asian Financial Institutions and Infrastructure', Annual Financial Stability conference, Asian Development Bank and Korean Financial Supervisory Service, 2 July 2013, Seoul, South Korea. Acting also as session chair and discussant.

'European Banking the Bumpy Road to Recovery', in the Business Leaders' symposium: 'Whither Europe?, 21 June 2013, Cambridge Judge Business School, University of Cambridge.

'The European Banking Union as a Fellowship of Ifs', in the symposium, 'Evolution in Monetary Law and Policy', Tercentenary of the Regius Chair, University of Glasgow, 14 June 2013.

'Contours of the European Banking Union and Some Doubts!', Bank of England and Prudential Regulation Authority, QMUL, Georgetown, 'Workshop of a distinguished group of experts on financial stability and the WTO', Bank of England, 17 May 2013.

'Financial Stability and Trade', 13th Annual WTO Conference, British Institute of International and Comparative Law, London, 16 May 2013.

'Unresolved Riddles of Financial Stability Reforms' in 22nd Hyman Minsky Annual Conference, 'Building a Financial Structure for a More Stable and Equitable Economy', Levy Economics Institute & Ford Foundation, NYC, 17-19 April 2013.

'The Leverage cycle and Bank Executive Compensation', International Financial Regulation Workshop, Boalt Hall (Berkeley) School of Law, University of California, Berkeley, 19-20 April 2013.

'The Global Regulation of the International Insurance Industry', in Geneva Association, 29th PROGRES Seminar on Insurance Regulation and Supervision, Geneva, 11-12 April 2013.

Conference Chair. 'Reshaping European Banking'. European Law Academy, Trier, 28 February -1 March 2013. Also Presenting a paper on 'Shadow Banking and Risk Migration'

Workshop Chair, 'Workshop on the Financial Sustainability of Banks', R. McCormick (LSE), UCL, Centre for Ethics and Law, 6 February 2013.

'Libor's Legacy: Too-big-to-fail, Too-big-to-regulate, and now Too-unethical-to-control, but is there an Alternative to the Mega-bank Model?' in the Allen & Overy, and Universities of New South Wales and Leeds conference, 'My Word is My Bond: Regulating for Integrity in the City', 15 January 2013, Allen & Overy LLP, London.

'Market Discipline and Corporate Governance in the EU Banking Sector: Intellectual Fallacies, Cognitive Boundaries, and Groupthink' with J. Cullen, in Law and Society Research Workshop: 'Post-crisis Trajectories of European Corporate Governance: Dealing with the Present and Shaping the Future', QMUL and the Leeds University Center for Business Law, September 2012.

'Systematic Governance Failures, Debt, and the Greek Crisis' presented at Debt, Sovereignty and Civil Society, Stavros Niarchos Foundation Center at Simon Fraser University and St Antony's College, University of Oxford, Vancouver, 25 April 2012.

'The Impact of Shadow Banking on the Regulation and Structure of the Banking Industry: Time for a Radical Rethink', meeting of the finance, financial law and international trade law experts, QMW, CCLS, London, 18 May 2012.

'Is there a case for a more standardised approach to sovereign debt restructuring? What is the role for the CDS market?', Financial Markets Law Committee and Association Europeenne pour Le Droit Bancaire et Financier Sovereign Debt Conference, held at the Bank of England, 6 February 2012.

‘Do Fractional Reserve Banks Have Any Future in Light of Recent Reforms?’, MBA Seminar, Athens University of Economics and Business, 20 October 2014, http://www.ode.aueb.gr/index.php/research/working-seminars

'Edges of Macroprudential Regulation and Some Scepticism', Credit Research Centre Seminar Series, School of Business, University of Edinburgh, 7 December 2012.

'Global Governance of Financial Markets', School of Law Seminar Series, University of Glasgow, 21 November 2012.

'Regulating Global Financial Institutions: The Unresolved Challenge', Law & Finance Seminar Series, University of Oxford, 3 November 2011.

FOCOFIMA Lecture: 'Global Financial Governance at Crossroads: Reasons to Despair, Reasons to Have Hope', University of Copenhagen, Faculty of Law, 10 June 2010.Conference and Workshop Organizer.

 

Conference and workshop organisation 

“A Capital Markets Union for Europe”, 26-27 January 2017, Clifford Chance LLP, Amsterdam, (an inter-disciplinary Conference) co-organized with Prof. Danny Busch and Prof. Guido Ferrarini.

“The PRA in the UK’s Regulatory System” keynote speaker: Sam Woods, chairman of the Prudential Regulation Authority and Deputy Governor, Bank of England, Edinburgh, 5 December 2016.

“Mapping the Sources of Systemic Risk” Centre of Commercial Law and Europe Institute Workshop, Edinburgh University 6 October 2015, (keynote Franklin Allen).

‘Redrawing Macroprudential and Financial Stability Policy in the Eurozone’ Edinburgh School of law, 12 March 2015 (keynote Martin Hellwig) (with the Scottish Institute for Research in Economics)

'Sovereign Debt and the Poverty of Nations' Global Justice Academy, University of Edinburgh, 22 May 2014, Organizer and Chair, (keynote Lee Buchheit)

Organizer and discussant, 'The Trajectory of Financial Law in the 21st Century' Centre of Commercial Law, University of Edinburgh, 21 May 2014.

Hong Kong University, University of New South Wales, Edinburgh University Conference 'Reconceptualizing Global Finance', Hong Kong University, 13-14 December 2013. Also conference co-organizer and co-chair. http://www.law.hku.hk/aiifl/documents/GlobalFinance-Flyerdd20Nov2013.pdf

Edinburgh High Level Workshop, 'The Future of the Financial Services Industry in the European Banking', Edinburgh University Law School, 27 September 2013, co-organized with the Chief Economist of the Scottish Government.

'Bank Structure, Regulation and Competition' presented at Financial Markets Group and the International Centre for Financial Regulation (25 Nov), LSE, 2011 (co-organized with Rosa Lastra & Charles Goodhart). 

 

Willingness to take Ph.D. students: Yes

Available Ph.D. research projects:
financial stability bank resolution finance and technology Global financial governance

Qualifications

Emilios holds an LLM in Banking and Finance Law and a PhD in Law and Economics both from the LSE, where he received a teaching scholarship. He completed his undergraduate studies at the University of Athens Law School, where he was the recipient of state scholarships, and spent time as ERASMUS LLB student in an English law school.

Research Interests

I have an active interest in public policy and financial reform. I currently conduct research on Long-term finance, public policy, and sustainable markets. This explains the short-comings of  the neo-liberal view of financial markets, which today have become loci and engines for the perpetuation of unfettered speculation. It also doubts the utility of complex and suffocating politically-driven regulation as well as the anticapitalist view of markets as re-distributive meachanisms. This is a position that can easily lead a researcher into "splendid isolation". I have already presented parts of this research in presitigious US institutions inc. the Wasserman Law & Finance workshop @ Yale Law School, the JFK School, and Levy institute, and Cambridge, UK is next. While every academic ought to remember Nitzche's words as to what makes one "stronger", I have been greatly encouraged by the very active engagement of and interaction with students during those talks. This has extended beyond the events themselves and I'm very grateful for theirs (and colleagues') extensive and passionate feedback notes and humbled by their insights. 

Concurrently I conduct research on financial stability, bank bail-ins, and optimal ways to tackle bank NPLs both within the eurozone and the wider framework including Asian banking markets.

Earlier research on bank leverage, bank bail-ins, and financial stability has led to a number of recent scholarly outputs  of which some have received extensive media attention. http://www.ft.com/cms/s/0/a9a41d96-c3e1-11e3-a8e0-00144feabdc0.html#axzz324aKH15vdie Welt 

I also supervise a  number of very talented students who conduct promising research in the above or related areas. Last one, a Scottish lawyer and mum,  impressed her examiners & passed with no corrections, some achievement for a law thesis that had a significant empirical component.

I'm always willing to supervise for a PhD outstanding and innovative students who are willng to work very hard. Believers in the value of holidays before you reach PhD submission (or your 40th birthday) need not apply. 

 

Indicative Grants: Arts and Humanities Research Council (AHRC) (2008-2009): Governance of global financial markets; award grade A+

Australian Research Council (2013-2016): for joint research with Professors Buckley(PI) and Arner on the study of systemic risk transmission channels.

Asian Development Bank/HKU (2013) (jointly with HKU academics) for research on the lessons the European Banking Union holds for East Asian Economic Integration.

Courses Taught

Practice of Corporate Finance and the Law (LLM)

Regulation of International Finance: the Law the Economics the Politics (LLM) (Course Organiser)

PhD Supervisees

Israel Cedillo Lazcano  'Legislative Challenges Relating to the Evolution of Money'

Shunyu Chi  'An Evaluation of the Transplantation of Takeover Rules from U.K. and U.S. from the Prospective of China'

Chia-Hsing Li  'Optimum Governance of Investment Conduct in the Capital Markets Union-A Legal and Economic Analysis'

Sean Molloy  'The Business of Peace: Exploring the relationship between business, socioeconomic rights, and Transitional Justice?'

Amanda Wyper  'An Evaluation of the Legal issues surrounding the implementation of the Automatic Enrolment Pensions Regime in the UK'

Books and Reports

Emilios Avgouleas, Ross P. Buckley, Douglas W. Arner, Reconceptualising Global Finance and its Regulation, (Cambridge University Press, 2016)
Abstract: The current global financial system may not withstand the next global financial crisis. In order to promote the resilience and stability of our global financial system against future shocks and crises, a fundamental reconceptualisation of financial regulation is necessary. This reconceptualisation must begin with a deep understanding of how today's financial markets, regulatory initiatives and laws operate and interact at the global level. This book undertakes a comprehensive analysis of such diverse areas as regulation of financial stability, modes of supply of financial services, market infrastructure, fractional reserve banking, modes of production of global regulatory standards and of the pressing need to reform financial sector ethics and culture. Based on this analysis, Reconceptualising Global Finance and its Regulation proposes realistic reform initiatives, which will be of primary interest to regulatory and banking legal practitioners, policy makers, scholars, research students and think tanks.

Emilios Avgouleas, Governance of Global Financial Markets: The Law, the Economics, the Politics, (Cambridge University Press, 2012)
Abstract: The recent financial crisis proved that pre-existing arrangements for the governance of global markets were flawed. With reform underway in the USA, the EU and elsewhere, Emilios Avgouleas explores some of the questions associated with building an effective governance system and analyses the evolution of existing structures. By critiquing the soft law structures dominating international financial regulation and examining the roles of financial innovation and the neo-liberal policies in the expansion of global financial markets, he offers a new epistemological reading of the causes of the global financial crisis. Requisite reforms leave serious gaps in cross-border supervision, in the resolution of global financial institutions and in the monitoring of risk originating in the shadow banking sector. To close these gaps and safeguard the stability of the international financial system, an evolutionary governance system is proposed that will also enhance the welfare role of global financial markets.

Emilios Avgouleas, The Regulation of Investment Services in Europe under MiFiD: Implementation and Practice, (Tottel Publishing, 2008)

Emilios Avgouleas, The Mechanics and Regulation of Market Abuse: A Legal and Economic Analysis, (Oxford University Press, 2005)
Abstract: Economic theory implies that financial markets play a prominent role in the efficient allocation of resources in the modern world. Financial markets can fulfil this role if they enjoy the confidence of investors and are free of abuse. The financial frauds associated with the collapse of Enron and the major crises in world leading corporations such as WorldCom, Adelphia, Tyco, and the ‘Wall Street financial scandals’ have shown that fraud, manipulation, and insider dealing retain a catastrophic presence in modern financial markets. Proper deterrence of market abuse is necessary not only for the effective operation of modern financial markets, but also for regaining investor confidence. This book analyses the mechanics and regulation of two of the most harmful market practices in the modern financial world: insider dealing and market manipulation, which together comprise the offence of market abuse. This book examines the United Kingdom and European Union regimes from an interdisciplinary perspective, also making extensive and critical use of United States case law. It emphasises the economic analysis of anti-fraud manipulation regulations and their effects upon market welfare and explores the possible deterrent benefits of civil law remedies.

Articles

Aimilios Avgouleas, Douglas Arner, 'The Eurozone Debt Crisis and the European Banking Union: “Hard Choices”, “Intolerable Dilemmas” and the Question of Sovereignty ', (2017), International Lawyer, Vol 50.1 (50th Anniversary Edition)
Abstract: The 2008 global financial crisis spread to most of the developed economies, including those of the European Union. Unfortunately, despite decades of effort to build a Single Financial Market, almost all EU jurisdictions lacked proper crisis resolution mechanisms, especially with respect to the cross-border dimensions of a global crisis. This led to a threat of widespread bank failures in EU countries and near collapse of their financial systems. Today, in the aftermath of the Eurozone financial crisis and the recent Brexit vote, the EU is at a critical crossroads. It has to decide whether the road to recovery runs through closer integration of financial policies to follow recent centralization of bank supervision and resolution in the European Banking Union (EBU) or whether to take the path of fragmentation with a gradual return to controlled forms of protectionism in the pursuit of narrow national interest, although the latter is bound to endanger the single market. In many ways the outcome of the British referendum points to that direction. Therefore, the policy dilemmas facing the EU and contemporary institution building within the Eurozone provide a key window into the future of both global and regional financial integration. This article offers a critical evaluation of these dilemmas and explains the wide ranging significance of post-Brexit policy choices in the EU.

Emilios Avgouleas, Charles Goodhart, 'Critical Reflections on Bank Bail-ins ', (2015), Journal of Financial Regulation, Vol 1, pp 3-29
Abstract: Many of the world’s developed economies have introduced, or are planning to introduce, bank bail-in regimes. Both the planned EU resolution regime and the European Stability Mechanism Treaty involve the participation of bank creditors in bearing the costs of bank recapitalization via the bail-in process as one of the (main) mechanisms for restoring a failing bank to health. There is a long list of actual or hypothetical advantages attached to bail-in centred bank recapitalizations. Most importantly the bail-in tool involves replacing the implicit public guarantee, on which fractional reserve banking has operated, with a system of private penalties. The bail-in tool may, indeed, be much superior in the case of idiosyncratic failure. Nonetheless, there is need for a closer examination of the bail-in process, if it is to become a successful substitute to the unpopular bailout approach. This paper discusses some of its key potential shortcomings. It explains why bail-in regimes will fail to eradicate the need for an injection of public funds where there is a threat of systemic collapse, because a number of banks have simultaneously entered into difficulties, or in the event of the failure of a large complex cross-border bank, except in those cases where failure was clearly idiosyncratic.

Emilios Avgouleas, Jay Cullen, 'Excessive Leverage and Bankers' Pay: Governance and Financial Stability Costs of a Symbiotic Relationship', (2014), Columbia Journal of European Law, Vol 21, pp 1-46

Emilios Avgouleas, Jay Cullen, 'Market Discipline and EU Corporate Governance Reform in the Banking Sector: Merits, Fallacies, and Cognitive Boundaries', (2014), Journal of Law and Society, Vol 41, pp 28-50
Abstract: Much contemporary analysis has concluded that the recent financial crisis and bank failures were, inter alia, the result of a breakdown in corporate governance regimes and market discipline. Reform of corporate governance structures and remuneration incentives is at the heart of regulatory reform both in the EU, and internationally. New regulations strongly advocate tighter investor monitoring and greater control over executives' remuneration as market based remedies to the woes of the financial sector, which will safeguard future financial stability. Aside from the markets' tendency to be short-termist, which puts an obvious limitation to this remedy, the biggest shortcoming of this approach is that it largely ignores three very important aspects of modern financial markets that cannot be contained through market discipline: (a) the interaction between socio-psychological phenomena, such as irrational exuberance, herding and panic induced contagion, (b) the epistemological properties of financial market innovation, which can result in complex structures that stretch to a breaking point the markets' and individuals' limited capacity to measure the risks involved in opaque institutional structures and markets, (c) inherent inability to predict the uncertain risk correlations that risky products, financial market, interconnectedness, and too-big-to-fail institution behaviour can bring about. Furthermore, even rationally and well-managed financial institutions can be a threat to the stability of the financial system. Therefore, this paper argues that recent EU regulatory reform to corporate governance, as a means to improve financial stability is a large-scale intellectual fallacy. Absent EU-wide structural reform to control risk-taking in large and complex financial institutions, the stability of the EU banking sector will remain compromised. Smaller and less interconnected banks will both improve bank corporate governance and create a safer and more stable financial sector.

Emilios Avgouleas, 'Rationales and Designs for the Implementation of an Institutional Big Bang in the Governance of Global Finance ', (2013), Seattle University Law Review, Vol 36, pp 321-90
Abstract: The colossal challenges facing International finance pertain to both its governance system and its dual utility and speculative functions, which have become ever more intertwined with the advent of financial innovation. In the aftermath of the Global Financial Crisis (GFC) a number of significant reforms are under way to address the second issue, including additional capital and liquidity requirements for banks, measures to battle interconnectedness in the financial sector, new resolution regimes, which would allow banks to fail more easily, and more strict frameworks for bank supervision and monitoring of systemic risk. Yet limited progress has been made with respect to governance structures, which, thus, will be the main focus of present analysis. In this article I provide an outline of a proposal for a new model of governance for global financial markets in order to address most of the above challenges in a way that would be more effective than the pre-existing regime or the architecture emerging as a result of the GFC.

Emilios Avgouleas, 'Effective Governance of Global Financial Markets: An Evolutionary Plan for Reform', (2013), Global Policy, Vol 4, pp 74-84
Abstract: Two questions remain widely open when it comes to global financial markets. First, what is the raison d’ etre of open global markets? Second, is it possible to foster open global markets without an International governance structure assigned the task of supervising them?Post-crisis regulatory reform presents an acute paradox. While the content of regulation is changing rapidly and in encouraging ways, the reform of governance structures is painfully slow. There is no formal governance structure dealing with cross-border supervision of big financial institutions. In addition, there is no crystalized institutional capacity at the International level dealing with cross-border crises and the resolution of global financial institutions. Other areas of concern are the global supervision of systemic risk, especially of risk originating in the opaque shadow banking markets, and the absence of a reliable finance research watchdog dealing with the production of regulatory standards. This article outlines an International governance framework to deal effectively with these concerns. Adoption of the proposed plan would lead to breaking down the territorial link in the supervision of systemic risk and of certain kinds of financial institution, without causing intolerable loss of sovereignty. In addition, the proposed structure is based on a set of explicit values. These can provide a strong signal to global markets that they ought to shift focus from speculation to development.

Emilios Avgouleas, Charles Goodhart, Dirk Schoenmaker, 'Bank Resolution Plans as a Catalyst for Global Financial Reform ', (2012), Journal of Financial Stability, Vol 9, pp 210-18
Abstract: Bank Resolution Plans (Living Wills) should help with the resolution of systemically important financial institutions (SIFIs) in distress. They should be used to clarify and simplify the legal structure and make it commensurate with the functional business lines of the institution. Living Wills could also prove the right regulatory instrument to achieve two further innovations in the resolution of SIFIs with cross-border presence. First, they could incorporate burden sharing arrangements between countries enabling burden sharing on an institution by institution basis. However, there would remain problems arising from the incompatibility of the laws governing cross-border bank insolvencies. Many countries are currently introducing special laws covering the resolution of SIFIs. This creates a window of opportunity to use Living Wills to introduce a second innovation: a consistent legal regime for the resolution of SIFIs across the G20 countries.

Emilios Avgouleas, 'Niamh Moloney, How to Protect Investors: Lessons from the EC and the UK (Cambridge, Cambridge University Press 2010) ', (2012), European Business Organization Law Review, Vol 13, pp 497-99

Emilios Avgouleas, 'A New Framework for the Global Regulation of Short Sales: Why Prohibition is Inefficient and Disclosure Insufficient', (2010), Stanford Journal of Law, Business & Finance, Vol 15, pp 376-425
Abstract: Short selling has long been regarded as aggressive speculation that destabilizes financial markets, raising concerns about their moral foundations. This view gathered unstoppable force in September 2008 when short sales were seen as the principal cause of precipitous falls in the market price of financial sector stocks. As a result, most developed market regulators declared a ban on short sales in financial sector stocks. This article argues that the best way to regulate short sales is through a dual strategy of disclosure and short trading halts, rather than a prohibition or an uptick rule. The short trading halts should be based on a sophisticated circuit breaker system that is focused on market conditions and preserves the proper function of the price formation mechanism. Disclosure and short trading halts should be complemented by a strict settlement regime, as recommended by the International Organization of Securities Commissions.

Emilios Avgouleas, Stavros Degiannakis, 'Trade Transparency and Trading Volume: The Impact of the Financial Instruments Markets Directive on the Trading Volume of EU Equity Markets', (2009), International Journal of Financial Markets and Derivatives, Vol 1, pp 96-123
Abstract: The EC Directive on financial instruments markets 2004 (MiFID) has introduced a number of order and trade publication obligations imposed on organised exchanges, alternative trading systems (ATS), and the class of broker dealers that execute transactions in shares internally. This article investigates the impact of MiFID's trade transparency rules on the trading volume of EU equity markets in a forward-looking mode. We use data extracted from the closest possible precedent and examine trading volume levels before and after trading in FTSE100 stocks on the London Stock Exchange (LSE) shifted from the quote-driven Stock Exchange Automatic Quotation System (SEAQ) to the order-driven securities electronic trading service (SETS). This change resulted in significantly increased transparency standards. Trading volume is measured on the basis of three criteria: volume-based turnover, value-based turnover and turnover ratio. No evidence is found indicating that higher transparency standards lead per se to higher levels of trading volume. Therefore, the impact of MiFID's transparency rules on trading volume in EU equity markets should become a matter of further study following their implementation.

Emilios Avgouleas, 'The Global Financial Crisis, Behavioural Finance and Financial Regulation: In Search of a New Orthodoxy', (2009), Journal of Corporate Law Studies, Vol 9, pp 23-59
Abstract: The global financial crisis brought the world banking system to the brink of collapse. The continuing operation of financial markets became possible only after the extensive and costly public rescues of some very big banks. It also brought into sharp focus the inadequacies of the contemporary model of financial regulation both at the national and the global level. This article argues that some of the measures endorsed in the G20 Summit for the revamping of national and global financial regulation, such as increased disclosure and a stronger capital base, and others targeting the enhancement of market discipline will prove less effective than anticipated. The reason for that is that they largely ignore the behavioural elements of the crisis. Instead, what is required is a radical rethinking of the contemporary model of national and global financial regulation. This article suggests a set of far-reaching reforms for the overhaul of the regulatory framework governing the licensing and supervision of banking institutions. It also proposes the establishment of a global licensing and supervisory regime for transnational investment funds with systemic importance, eliminating most shadow banking operators. The catastrophic consequences of the crisis and the findings of behavioural finance provide solid support for these proposals.

Emilios Avgouleas, 'The Global Financial Crisis and the Disclosure Paradigm in European Financial Regulation: The Case for Reform', (2009), European Company and Financial Law Review, Vol 6, pp 440-75

Emilios Avgouleas, 'Banking Supervision and the Special Resolution Regime of the Banking Act 2009: The Unfinished Reform', (2009), Capital Markets Law Journal, Vol 4, pp 201-35

Emilios Avgouleas, 'International Financial Regulation, Access to Finance, Systemic Stability, and Development ', (2008), LAWASIA Journal, pp 62-76

Emilios Avgouleas, 'EC Securities Regulation, A Single Regime for an Integrated Securities Market: Harmonised We Stand, Harmonised We Fall', (2007), Journal of International Banking Law and Regulation, Vol 22, pp 79-87, 153-64

Emilios Avgouleas, 'Access to Finance, Microfinance, and International Banking Regulation: A New Approach to Development', (2007), Manchester Journal of International Economic Law, Vol 4, pp 3-51

Emilios Avgouleas, 'Critical Evaluation of the New EC Financial Market Regulation: Peaks and Troughs in the Road Ahead', (2005), Transnational Lawyer, Vol 18, pp 179-228

Emilios Avgouleas, 'The New EC Financial Markets Legislation and the Emerging Regime for Capital Markets ', (2004), Yearbook of European Law, Vol 23, pp 321-61

Emilios Avgouleas, 'Financial Market Regulation and the New Market Landscape ', (2000), International and Comparative Corporate Law Journal, Vol 2, pp 9-118

Emilios Avgouleas, 'The Harmonisation of Rules of Conduct in EU Financial Markets: Economic Analysis, Subsidiarity and Investor Protection', (2000), European Law Journal, Vol 6, pp 72-92
Abstract: The rules that regulate the market conduct of traders and the conduct of the business of investment intermediaries in the context of financial markets have not been comprehensively harmonised in the EU. As a result, cross-border trading in financial products and provision of other financial services is regulated by largely asymmetrical national rules. Host state regulators have remained responsible for the supervision of the compliance of banks and investment firms with national rules of conduct when they engage in the cross-border provision of banking and investment services. However, the advent of both the EMU and global trends in the financial services industry have transformed the market landscape. The regulatory challenges that recent market developments pose require a more efficient supervisory regime and a harmonised regulatory environment. These points were focal in the Commission's recent Communication, entitled 'Action Plan for Financial Markets'. This article examines the current regulatory framework in the area of market conduct and conduct of business in the EU. It argues, with the aid of economic analysis, for the harmonisation of rules of market conduct and for the further harmonisation of conduct of business rules at retail investor level. The harmonisation of conduct of business rules goes beyond the Commission's plans and might raise issues of Community competence. However, such harmonisation is dictated by the challenges of investor protection that changing market conditions create. Also, the transaction costs associated with indirect fragmentation inhibit the growth of cross-border trade in this area.

Emilios Avgouleas, 'Market Accountability and Pre- and Post-trade Transparency: The Case for the Reform of the EU Regulatory Framework: Parts 1 & 2', (1998), The Company Lawyer, Vol 19, pp 162-70; 202-10

Chapters

Emilios Avgouleas, 'Large Systemic Banks and Fractional Reserve Banking, Intractable Dilemmas in Search of Effective Solutions ' in Douglas Arner, Emilios Avgouleas, Ross Buckley (ed.) Reconceptualizing Global Finance and its Regulation (Cambridge University Press 2016) 659-692
Abstract: Banks have been a ubiquitous feature of economic life since at least the18th century. Yet the transformation that banks have undergone in thepast thirty years has made the struggle of making them safe ever harderand more challenging. Arguably, the notion of market discipline aidingfinancial stability in the financial sector is sometimes stretched to abreaking point for three reasons: inherently flawed corporate governanceincentives, the (albeit now fading) possibility of a bailout, andcomplexity. This chapter intends to provide a balanced, all encompassing,and in depth discussion of the social utility of big banks in a fractionalreserve banking system in the post-2008 context utilizing a very widearray of empirical and theoretical works. It will, thus, discuss thedilemmas surrounding the desired demolition of the Too-big-to-fail bank(TBTF) in the post-reform era. To this effect, the chapter will explain that,while well calibrated structural reforms and special resolution regimeswill certainly help to alleviate the TBTF problem in the banking sector,they will not eliminate it.

Emilios Avgouleas, 'Regulating Financial Innovation A Multifaceted Challenge to Financial Stability, Consumer Protection, and Growth' in Niamh Moloney, Eilis Ferran, Jennifer Payne (ed.) The Oxford Handbook of Financial Regulation (Oxford University Press 2015) 659-689
Abstract: The chapter reconceptualizes financial innovation. In this context, it discusses the risks of financial regulation and contemporary regulations addressing those risks. It provides a new framework to regulate financial innovation to foster long-term growth and curb speculation by altering innovators' incentives.

Emilios Avgouleas, Douglas W. Arner, 'The Broken Glass of European Integration Origins and Remedies of the Eurozone Crisis' in C. L. Lim, Bryan Mercurio (ed.) International Economic Law after the Global Crisis (Cambridge University Press 2015) ch 4

Emilios Avgouleas, Douglas W. Arner, Uzma Ashraf, 'Regional Financial Arrangements Lessons from the Eurozone Crisis for East Asia' in Iwan J. Azis, H. S. Shin (ed.) Global Shock, Asian Vulnerability and Financial Reform (Edward Elgar 2014) 377-415

Emilios Avgouleas, 'The Law and Economics of State Intervention in the Anglo-American Banking Sector ' in Peter Jung, Jürgen Schwarze (ed.) Finanzmarktregulierung in der Krise (Mohr Siebeck 2014) 17-63

Emilios Avgouleas, 'Breaking Up Mega-Banks A New Regulatory Model for the Separation of Commercial Banking from Investment Banking' in Panagiotis Delimatsis, Nils Helger (ed.) Financial Services at the Crossroads (Kluwer Law International 2011) 179-210

Emilios Avgouleas, 'Short Sales Regulation in Seasoned Equity Offerings What are the Issues?' in Dan Prentice, Arad Reinsburg (ed.) Corporate Finance Law in the UK and EU (Oxford University Press 2011) 117-38

Emilios Avgouleas, 'The Vexed Issue of Short Sales Regulation and the Global Financial Crisis ' in Kern Alexander, Niamh Maloney (ed.) Law Reform and Financial Markets (Edward Elgar 2011) 71-110

Emilios Avgouleas, 'What Future for Disclosure as a Regulatory Technique Lessons from Behavioural Decision Theory and the Global Financial Crisis' in Iain MacNeil, Justin O'Brien (ed.) The Future of Financial Regulation (Hart Publishing 2010) 211-31

Emilios Avgouleas, 'The Behavioural Aspects of the Global Financial Crisis and Regulatory Reform ' in Robert W. Kolb (ed.) Lessons from the Financial Crisis (John Wiley & Sons, Inc. 2010) 391-400

Emilios Avgouleas, 'International Credit Markets Players, Financing Techniques, Instruments and Regulation' in Hossein Bidgoli (ed.) The Handbook of Technology Management (John Wiley & Sons, Inc. 2009) 675-92

Emilios Avgouleas, 'An Overview of the MiFID Regime for the Regulation of Financial Services and Markets ' in Emilios Avgouleas (ed.) The Regulation of Investment Services in Europe under MiFiD (Tottel Publishing 2008) 1-12

Emilios Avgouleas, 'Reforming Investor Protection Regulation The Impact of Cognitive Biases' in M. Faure, F. Stephen (ed.) Essays in the Law and Economics of Regulation in Honour of Anthony Ogus (Intersentia 2008) 143-66

Working Papers

Aimilios Avgouleas, 'Bank Leverage Ratios and Financial Stability: A Micro- and Macroprudential Perspective ' 2015
Abstract: Bank leverage ratios have made an impressive and largely unopposed return; they are mostly used alongside risk-weighted capital requirements. The reasons for this return are manifold, and they are not limited to the fact that bank equity levels in the wake of the global financial crisis (GFC) were exceptionally thin, necessitating a string of costly bailouts. A number of other factors have been equally important; these include, among others, the world’s revulsion with debt following the GFC and the eurozone crisis, and the universal acceptance of Hyman Minsky’s insights into the nature of the financial system and its role in the real economy. The best examples of the causal link between excessive debt, asset bubbles, and financial instability are the Spanish and Irish banking crises, which resulted from nothing more sophisticated than straightforward real estate loans. Bank leverage ratios are primarily seen as a microprudential measure that intends to increase bank resilience. Yet in today’s environment of excessive liquidity due to very low interest rates and quantitative easing, bank leverage ratios should also be viewed as a key part of the macroprudential framework. In this context, this paper discusses the role of leverage ratios as both microprudential and macroprudential measures. As such, it explains the role of the leverage cycle in causing financial instability and sheds light on the impact of leverage restraints on good bank governance and allocative efficiency.

Emilios Avgouleas, Charles Goodhart, 'A Critical Evaluation of Bail-in as a Bank Recapitalisation Mechanism ' 2014
Abstract: Many of the world’s developed economies have introduced, or are planning to introduce, bank bail-in regimes. Both the planned EU resolution regime and the European Stability Mechanism Treaty involve the participation of bank creditors in bearing the costs of bank recapitalization via the bail-in process as one of the (main) mechanisms for restoring a failing bank to health. There is a long list of actual or hypothetical advantages attached to bail-in centred bank recapitalizations. Most importantly the bail-in tool involves replacing the implicit public guarantee, on which fractional reserve banking has operated, with a system of private penalties. The bail-in tool may, indeed, be much superior in the case of idiosyncratic failure. Nonetheless, there is need for a closer examination of the bail-in process, if it is to become a successful substitute to the unpopular bailout approach. This paper discusses some of its key potential shortcomings. It explains why bail-in regimes will fail to eradicate the need for an injection of public funds where there is a threat of systemic collapse, because a number of banks have simultaneously entered into difficulties, or in the event of the failure of a large complex cross-border bank, except in those cases where failure was clearly idiosyncratic.

Emilios Avgouleas, 'Regulating Financial Innovation: A Multifaceted Challenge to Financial Stability, Consumer Protection, and Growth' 2014
Abstract: The chapter reconceptualizes financial innovation. In this context, it discusses the risks of financial innovation and contemporary regulatory reforms addressing those risks. It provides a critique of contemporary reforms. Finally, it stresses the need for a new framework to regulate financial innovation to foster long-term growth and curb speculation. Regulation ought to focus on altering innovators' incentives through a properly balanced mix of incentives and sanctions.

Emilios Avgouleas, Jay Cullen, 'Excessive Leverage and Bankers’ Pay: Governance and Financial Stability Costs of a Symbiotic Relationship' 2014
Abstract: Debt has traditionally been viewed as an effective corporate governance tool. On the other hand, high leverage levels can lead to rapid expansion of the size of bank assets maximizing, in the short-to-medium term, banks return on equity. In the absence of regulatory controls on leverage, all it takes to assume excessive risks, even for benign bankers, is to imitate competitor business strategies. This form of herding can be motivated by compensation considerations or by career concerns. However, while bankers’ compensation has been a major factor behind bank short-termism, excessive leverage creates serious governance/agency costs even in the absence of compensation incentives. Therefore, a reasonably protective leverage ratio can prove an effective measure in containing rent seeking and smoothing up the leverage cycle to improve bank governance, prevent deep recessions, and safeguard financial stability.

Emilios Avgouleas, Douglas W. Arner, 'The Eurozone Debt Crisis and the European Banking Union: A Cautionary Tale of Failure and Reform' 2013
Abstract: The 2008 global financial crisis spread to most of the developed economies, including those of the European Union. Unfortunately, despite decades of effort to build a Single Financial Market, almost all EU jurisdictions lacked proper crisis resolution mechanisms, especially with respect to the cross-border dimensions of a global crisis. This led to a threat of widespread bank failures inEU countries and near collapse of their financial systems. Today, in the context of the Eurozone financial crisis, the EU is at a critical crossroads. It has to decide whether the road to recovery runs through closer integration of financial policies and of bank supervision and resolution, or whether to take the path of fragmentation with a gradual return to controlled forms of protectionism in the pursuit of narrow national interest, although the latter is bound to endangerthe single market. Therefore, the policy dilemmas facing the EU and contemporary institution building within the Eurozone provide an important window into the future of both global and regional financial integration.

Emilios Avgouleas, 'Rationales and Designs to Implement an Institutional Big Bang in the Governance of Global Finance ' 2012
Abstract: The colossal challenges facing International finance pertain to both its governance system and its dual utility and speculative functions, which have become ever more intertwined with the advent of financial innovation. In the aftermath of the Global Financial Crisis (GFC) a number of significant reforms are under way to address the second issue, including additional capital and liquidity requirements for banks, measures to battle interconnectedness in the financial sector, new resolution regimes, which would allow banks to fail more easily, and more strict frameworks for bank supervision and monitoring of systemic risk. Yet limited progress has been made with respect to governance structures, which, thus, will be the main focus of present analysis. In this article I provide an outline of a proposal for a new model of governance for global financial markets in order to address most of the above challenges in a way that would be more effective than the pre-existing regime or the architecture emerging as a result of the GFC.

Emilios Avgouleas, Jay Cullen, 'Market Discipline and Corporate Governance in the EU Banking Sector: Intellectual Fallacies, Cognitive Boundaries, and Groupthink' 2012
Abstract: Much contemporary analysis has concluded that the recent financial crisis and bank failures were, inter alia, the result of a breakdown in corporate governance regimes and market discipline. Reform of corporate governance structures and remuneration incentives is at the heart of regulatory reform both in the EU, and internationally. New regulations strongly advocate tighter investor monitoring and greater control over executives' remuneration as market based remedies to the woes of the financial sector, which will safeguard future financial stability. Aside from the markets' tendency to be short-termist, which puts an obvious limitation to this remedy, the biggest shortcoming of this approach is that it largely ignores three very important aspects of modern financial markets that cannot be contained through market discipline: (a) the interaction between socio-psychological phenomena, such as irrational exuberance, herding and panic induced contagion, (b) the epistemological properties of financial market innovation, which can result in complex structures that stretch to a breaking point the markets' and individuals' limited capacity to measure the risks involved in opaque institutional structures and markets, (c) inherent inability to predict the uncertain risk correlations that risky products, financial market, interconnectedness, and too-big-to-fail institution behaviour can bring about. Furthermore, even rationally and well-managed financial institutions can be a threat to the stability of the financial system. Therefore, this paper argues that recent EU regulatory reform to corporate governance, as a means to improve financial stability is a large-scale intellectual fallacy. Absent EU-wide structural reform to control risk-taking in large and complex financial institutions, the stability of the EU banking sector will remain compromised. Smaller and less interconnected banks will both improve bank corporate governance and create a safer and more stable financial sector.

Conference Papers

Emilios Avgouleas, 'Cross-border Bank Restructuring and Resolution: Challenges and Proposed Remedies' presented at International Bar Association, Annual Conference, Banking and Insolvency Law Sections Joint Session on Cross-border Bank Resolution Boston United States 2013
Abstract: Presented at International Bar Association, Annual Conference, Banking and Insolvency Law Sections, Joint Session on Cross-border Bank Resolution

Emilios Avgouleas, 'Regional Financial Arrangements: Lessons from the Eurozone Crisis for East Asian Financial Institutions and Infrastructure' presented at Asian Development Bank Seminar on Financial Regulation Seoul Korea, Republic of 2013
Abstract: Financial integration in East Asia has been building steadily over the past two decades. In order to support this process, officials in the region have undertaken a range of initiatives. These include, in particular, the Chiang Mai Initiative Multilateralisation (CMIM), the Executives’ Meeting of East Asia Pacific Central Banks (EMEAP), regional initiatives of international organizations such as the Bank for International Settlements (BIS) and Financial Stability Board (FSB), and aspects of ASEAN, the ASEAN Economic Community (AEC) and ASEAN+3. Prior to the global financial crisis (GFC) and the Eurozone debt crisis, the European Union had served as a model for East Asian financial integration. The lessons learnt by the failure of EU institutions to deal first with the consequences of the GFC and subsequently with the Eurozone debt crisis are also useful and, in part, relevant to the East Asian financial integration process. This paper reviews the causes of the Eurozone financial crisis and draws parallels with the weak institutional infrastructures underpinning East Asian financial arrangements. The paper focuses on two areas of great concern: (a) crisis prevention and (b) crisis resolution. In particular, it highlights the challenges raised by integrated supra-national banking markets in the absence of suitable institutions to absorb financial stability shocks. Based on this discussion the paper will present suggestions for future development of East Asian regional financial arrangements as they relate to crisis prevention and resolution. Finally, the paper links the financial stability debate with the more general issues of financial liberalization and free movement of capital, trade in financial services, and freedom of establishment in the context of the AEC and ASEAN+3.

Emilios Avgouleas, 'Gaps in Post-Crisis Financial Reforms ' presented at 22nd Annual Hyman P. Minsky Conference: Building a Financial Structure for a More Stable and Equitable Economy New York United States 2013

Emilios Avgouleas, James Cullen, 'Bank Capital Structure, Leverage, and Executive Compensation ' 2013
Abstract: Presented at 'Berkeley International Financial Regulation Workshop', Berkeley Law SchoolHigh leverage levels led to virtually limitless expansion of bank asset size, which maximized, in the short- to medium term, banks’ return on equity. In the absence of regulatory controls on leverage, all it takes to assume excessive risks, even for benign senior bank managers, is to imitate competitor business strategies and herd. Therefore, while executive greed has been a major factor behind bank short-termism and excessive risk-taking, the caricature of the villainous banker betting the bank to increase the value of her stock options might, to a certain extent and in certain cases, be more fiction than part of real life. High leverage/high risk asset books might have, instead, been built due to herding caused by peer pressure, as competitor banks maximized shareholder returns through excessive use of cheap debt. If that is the case, then contemporary reforms that have given so much attention to an issue of secondary importance (executive compensation), instead of one of cardinal importance (leverage), are bound to produce, in the long-term, sub-optimal results, notwithstanding the conspicuous political gains of such a strategy.

Emilios Avgouleas, 'State Intervention and Anglo-American Bank Regulation ' presented at 34th Annual Congress, 'Legal Order and Comparative Law in the Financial Crisis (34 Tagung fur Rechtsvergeleichung, 'Recht und Rechtsvergleichung in der Finanzcrise') Marburg Germany 2013