12 Facts About Financial law

Financial law is the law and regulation of the commercial banking, capital markets, insurance, derivatives and investment management sectors.

Understanding financial law is crucial to appreciating the creation and formation of banking and financial regulation, as well as the legal framework for finance generally.

Financial law is understood as consisting of three pillars of law formation, these serve as the operating mechanisms on which the law interacts with the financial system and financial transactions generally.

Further, whilst regulation is often formulated through legislative practices; market norms and case law serve as primary architects to the current financial system and provide the pillars upon which the markets depend.

Soft Financial law can fill market uncertainties what are produced by common Financial law schemes.

Soft Financial law has practical effects in that it is liable in many cases to be turned into "hard Financial law", but with verified and experienced practice evidence.

Financial law markets have developed particular methods for taking security in relation to transactions, this is because collateral operates as a central method for parties to mitigate the credit risk of transacting with others.

Chen-Wishart's discussion of the importance of consideration within the bargain theory of contracts enunciates the emphasis the English Financial law has placed on benefit and deliberateness when contracting.

The approach to financial law is unique depending on the structure of the financial instrument.

Primary purpose of financial law is to allocate risk from one person to another and change the nature of risk being run by the protection buyer into the 'credit risk' of the risk taker.

An additional area of relevant derivatives Financial law is shown in the cases of Dharmala and Peekay, both of which involved arguments of mis-selling derivative transactions.

The Financial law pertaining to CDOs is particularly noteworthy, primarily for its use of legal concepts such as legal personality, and risk transfer to develop new products.