The Telegraph, May 3, Barnabas Reynolds
In all the maelstrom of debate about the future of global financial services in light of Brexit, one key point is often forgotten. That is, that the UK’s common law, pragmatic approach to law and regulation is intrinsically the safest for financial services, and conducting financial business under other available regimes introduces dangerous risk into the system which cannot be quantified or managed.
For the common law is the bedrock supporting the global financial market. This system, based on judicial precedent, targeted statutory intervention, and a respect for the terms of commercial contracts, is in use throughout most of the US and Commonwealth.
But it is the forms used in England and New York that are by far the most popular. Underpinned by strong governance capable of withstanding special interests, national, international, or commercial, they have proved their ability to evolve flexibly with the markets while achieving an appropriate degree of predictability. English law is particularly pre-eminent.
Numerous market developments have been made possible by English common law. For instance, it developed a regime for the netting of derivatives exposures, which is vital to facilitating legally certain exposures to financial risks and reducing a multiplicity of exposures between two parties to a single net sum.
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