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Legal and Conduct Risk in the Financial Markets, 3rd Edition by McCormick, Roger; Stears, Chris (22nd March 2018)

Part IV Regulatory and Other Developments in the UK 2010‒2016, 16 General Legal and Conduct Risk Implications of the Crises and Regulator-Led Redress

Roger Mccormick, Chris Stears

From: Legal and Conduct Risk in the Financial Markets (3rd Edition)

Roger McCormick, Chris Stears

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved.date: 25 April 2019

Subject(s):
Banking — Financial regulation — UK Financial Conduct Authority (FCA)

In the post-financial crisis era, conduct regulation has permeated every facet of an institution’s operations. Not only does the legal framework for the delivery of redress impact the legal risk profile of an activity, but the very ‘approach’ of the regulator exacerbates the legal risk inherent in that activity. This issue is of specific relevance in the context of mis-selling cases, as the regulator may direct (or otherwise sponsor or influence) the terms of redress and in ways that may not be perfectly aligned to a strict application of liability under English common law. This chapter first explores post-financial crisis litigation and criminal charges and the influence of government and regulators on the provision of redress. It then analyzes a legal brake on liability — specifically, the impact of contractual estoppel in mis-selling cases. It concludes with a review of the regulatory factors relevant to redress and the leveraging of post-crises sentiment to promote extra-regulatory schemes.

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