The Single Supervisory Mechanism – Panacea or Quack Banking Regulation? This post comes from Tobias Tröger, LLM’04.

February 6, 2015 in Uncategorized by Anastasia A. Tolu, M.Jur. CGC Site Administrator

Preliminary Assessment of the New Regime for the Prudential Supervision of Banks with ECB Involvement.

In a recent article I analyze the new architecture for the prudential supervision of banks in the euro area. I am primarily concerned with the likely effectiveness of the Single Supervisory Mechanism (SSM) as a regime that intends to bolster financial stability in the steady state.

Using insights from the political economy of bureaucracy I find that the SSM is overly focused on sharp tools to discipline captured national supervisors and thus under-incentivizes their top-level personnel to voluntarily contribute to rigid supervision. The success of the SSM in this regard will hinge on establishing a common supervisory culture that provides positive incentives for national supervisors. To this end, the internal decision making structure of the ECB in supervisory matters provides some integrative elements. Yet, the complex procedures also impede swift decision making and do not solve the problem adequately. Ultimately, a careful design and animation of the ECB-defined supervisory framework and the development of inter-agency career opportunities will be critical.

The ECB will become a de facto standard setter that competes with the EBA. A likely standoff in the EBA’s Board of Supervisors will lead to a growing gap in regulatory integration between SSM-participants and other EU Member States.

Joining the SSM as a non-euro area Member State is unattractive because the current legal framework grants no voting rights in the ECB’s ultimate decision making body. It also does not supply a credible commitment opportunity for Member States who seek to bond to high quality supervision

The article can be accessed here.

Tobias is a Professor of Private Law, Business and Trade Law at Goethe University, Frankfurt, Germany.

— Anastasia Tolu, Corporate Governance Concentration site administrator

February 6, 2015


Announcement from Anastasia Tolu

November 19, 2014 in Uncategorized by Anastasia A. Tolu, M.Jur. CGC Site Administrator

Dear All:

I hope you are enjoying your professional success around the globe. I am back with CCGC and encourage you to send your professional milestones (publications, appointments and such) to me for sharing on our Forum.

Looking forward to continuing working with you!

With best wishes from Cambridge,

— Anastasia Tolu, Corporate Governance site administrator

November 19, 2014



Corporate groups regulation in Europe. This post comes from Tobias Tröger, LLM’04.

November 18, 2014 in Uncategorized by Anastasia A. Tolu, M.Jur. CGC Site Administrator

In a forthcoming book chapter that I presented at Fordham Corporate Law Center in March, 2014, I contrast the recent European initiatives on regulating corporate groups with alternative approaches.

I find that the European Commission’s proposal to submit (significant) related party transactions to enhanced transparency, outside fairness review, and ex ante shareholder approval is flawed in its design and based on contestable assumptions that institutional investor voting is sufficiently informed. In particular, the contemplated exemption for transactions with wholly owned subsidiaries allows controlling shareholders to circumvent the rule extensively. Moreover, vesting voting rights with (institutional) investors will not yield the informed assessment that is hoped for because these investors will rationally abstain from actively monitoring controlling shareholders’ pertinent transactions. Institutional investors will also rely largely on proxy advisory firms, while the competency of these firms in analyzing non-routine related party transactions remains questionable.

I further delineate that the contemplated recognition of an overriding interest of the group requires strong counterbalances to adequately protect minority shareholders and creditors. Hence, if the Commission choses to go down this route it might end up with a comprehensive regulation that is akin to the unpopular Ninth Company Law Directive in spirit, though not in content.

More information on the book chapter: Troeger, Tobias H., Corporate Groups (September 22, 2014). SAFE Working Paper No. 66. Available at SSRN.

Tobias is a Professor of Private Law, Business and Trade Law at Goethe University, Frankfurt, Germany.


— Anastasia Tolu, Corporate Governance site administrator

November 19, 2014

LUISS Summer School on European and Comparative Company Law

May 28, 2014 in Uncategorized by tlc-admin

LUISS Guido Carli, in cooperation with Leiden University and under the aegis of the Centre for European Company Law (CECL), has launched its first Summer School on European and Comparative Company Law, which will take place in Rome, from July 7 to July 19, 2014.  Several people associated with the concentration (Luca Enriques, Nomura Visiting Professor of International Financial Systems in 2012-2013 at HLS, where he taught Comparative Corporate Governance in the Concentration, Jan Lieder, LL.M. ’09, Pavlos Masouros, LL.M. ’09, Federico Raffaele, LL.M. ’12) will be on the faculty for the event.  If you or someone you know might be interested in this program, please go to the website for more information.

Disclosure and Financial Market Regulation

May 6, 2014 in Uncategorized by tlc-admin

This post comes from Sergio Gilotta, LL.M. 09. Sergio is currently assistant professor at the University of Bologna.  Luca Enriques is currently a professor at LUISS, in Rome, and will shortly join Oxford. Luca co-taught the concentration at Harvard in 2012–2013.

In a recent paper, prof. Luca Enriques and I discuss the role of disclosure in financial market regulation. Focusing mainly on issuer disclosure, we recall the various goals that academics and policymakers associate to disclosure-based regulatory techniques and discuss the rationales in support of mandatory, as opposed to voluntary, disclosure. We highlight the limits of disclosure as a regulatory technique and the costs – both direct and indirect – it involves. We conclude by addressing few selected issues that, in our view, are particularly representative of the challenges that today’s policymakers face in the area of mandatory disclosure.

The paper is a draft chapter for a forthcoming volume, The Oxford Handbook on Financial Regulation, edited by Eilís Ferran, Niamh Moloney, and Jennifer Payne, (Oxford University Press) and can be found in full text here.