Cyprus-Forum.com

[Tim Drayton]

Another explanation of how governing law clauses work:

https://www.ashurst.com/doc.aspx?id_Resource=4721

Anyway, the basic point is that, if, as Steve Keen asserts, players on the international market insist on these markets being regulated under English law (so why are they happy to trade on the New York and Tokyo markets?), there are ways and means of making this possible.

[Robin Hood]

TD:

Yes, and in the same way, a UK bank operating in Cyprus will be governed by Cyprus banking law. Thus, the assertion "English law has been chosen for the Banking system" holds no water. A UK bank that operates in Germany will fall under German banking law and regulations, yes.

You have misunderstood what I said! Purely an assumption on my part, because if it were not so, I can’t see the purpose of the ‘passport’. With a ‘passport’ a Cypriot bank can operate in the UK under its own banking regulations and visa-versa for the UK bank operating in Cyprus. So, as you say, moving permanently from the UK to Germany WILL require a change in the laws those companies operate under.

Steve Keen isn't a lawyer, either, but I see you have no problem about him spouting off about the law. I think I know more about international private law than he does, actually.

A bit of a silly remark isn’t it? The guy has credibility. He has been an economist for 40+ years, is regarded as an authority on the subject he teaches (whether you agree with him or not) and has more knowledge on the subject of financial markets, their operation and function, than you or I will ever have. Unless you can tell me what your legal and economic qualifications/experience is on the subject, I could have no way of deciding whether you or Keen are the more credible.

You disagree with Keen but do not give your reason ...... you just see it differently. He can give reasons/explanations for what he says, for his proposals and as far as I am concerned he has said nothing which is obviously way out of the ball park, to my knowledge. He also concurs with Richard Werner (another respected economist) which he details in the papers I linked to previously. Both their arguments make sense to me, are logical and are backed by research, experience and, in the case of Werner, a detailed empirical test of the theory ..... that is completely supported by the evidence from that experiment.

I am afraid the Law is far too big a subject for me to comprehend. But, what I have come to realise over the years, is that for every law that goes onto the statute books, there is another that can be used to countermand it. That’s why Barristers get paid so much...... they know these laws in detail and have almost instant recall.

[Tim Drayton]

You disagree with Keen but do not give your reason.

I have given my reasons.

[Tim Drayton]

So, as you say, moving permanently from the UK to Germany WILL require a change in the laws those companies operate under.

Here we go round and round and round the same mulberry bush. In my opinion:

1- It is a spurious claim that international financial markets have to operate under English law in the first place.
2- Even were we, for the sake of argument, to accept that point 1 were true, there are actually ways of making financial markets operating outside England subject to English law, if this was wished for.

[Tim Drayton]

A bit of a silly remark isn’t it? The guy has credibility. He has been an economist for 40+ years, is regarded as an authority on the subject he teaches (whether you agree with him or not) and has more knowledge on the subject of financial markets, their operation and function, than you or I will ever have. Unless you can tell me what your legal and economic qualifications/experience is on the subject, I could have no way of deciding whether you or Keen are the more credible.

There are plenty of economists with great credibility who are regarded as authorities on their subject who say that it will be a disaster for the UK if it leaves the EU. In fact, as Keen himself said in the interview, they are in the majority. So, if you are going to apply the above logic, Keen must be wrong because more authorities in the field disagree with him than agree with him.

How about producing valid intellectual arguments in favour of your positions, rather than resorting to retorts like "There was a bloke on TV last night who agreed with me so I must be right, and, what a shame, you can't watch this in Cyprus." I have provided arguments as to why I think he is wrong. This is a discussion forum and you need to counter these arguments with arguments of your own, not come up with lame comments like Steve Kene is regarded as an authority and you're not. That's just childish.

[Tim Drayton]

He has been an economist for 40+ years, is regarded as an authority on the subject he teaches (whether you agree with him or not) and has more knowledge on the subject of financial markets, their operation and function, than you or I will ever have.

According to Wikepedia:

"Most of Steve Keen's recent work focuses on modeling Hyman Minsky's financial instability hypothesis and Irving Fisher's debt deflation. The hypothesis predicts that an overly large private debt-to-GDP ratio can cause deflation and depression."

https://en.wikipedia.org/wiki/Steve_Keen

So, he is not a specialist in the workings of financial markets. And, if he does not understand that international financial markets could hypothetically be set up in one country so as to be governed by the law of another country, this means that he does not know much about international private law. If you want to know where my knowledge in this area comes from, it is the result of spending years translating commercial contracts and litigation documents in disputes over contracts between large companies, and also reading legal textbooks in my free time to gain a better overall grasp of the subject matter.

[Robin Hood]

I find it hard to believe you can just chose which banking Laws you wish to apply!

That is certainly what you implied ..... freedom of choice!

No, well I didn't say that. If you want to know what a governing law clause is, you could at least read the article I quoted. In all jurisdictions where liberal free-market economics is the dominant pardigm - most jurisdictions nowadays - under the doctrine of freedom to contract the parties are free to agree anything they like provided it does not run counter to morality, imperative legal provisions or public policy, and this includes the freedom to determine which legal system the contract is to be governed by.

Then I don't see the argument that it will take years for the UK to negotiate to leave the EU if that is the case. We then decide which terms of contract we agree with individual countries that have, apparently, the same freedom of choice to apply what suits them. I also fail to see how you can have monetary union whilst all parties do their own thing. It would have to be a common set of rules for all members of the 'Club'. To join the 'Club' you accept a new rule book?

To me, that was the fundamental reason I believe that for the UK to operate outside a political Union, as we do with the monetary union, would be our advantage. We should get to negotiate freely with individual governments in the EU to arrive at a mutually beneficial trade arrangement. The EU Federal enthusiasts see this as a threat to their concept of a Federal State of Europe.

[Robin Hood]

Another explanation of how governing law clauses work:

https://www.ashurst.com/doc.aspx?id_Resource=4721

Anyway, the basic point is that, if, as Steve Keen asserts, players on the international market insist on these markets being regulated under English law (so why are they happy to trade on the New York and Tokyo markets?), there are ways and means of making this possible.

I don't think he said that! He merely stated that the City financial system (being outside the Eurozone) operated under British law and this would need to be changed if it was transferred to Frankfurt? This is because, as I said in the previous post, I don't see how you can have any Union with different procedures and regulations applied by each member. It is illogical ..... at least to me!

In engineering it would be like trying to apply metric and imperial standards on the same plant ...... it would be a bloody nightmare!

[Robin Hood]

You disagree with Keen but do not give your reason.

I have given my reasons.

Fair enough, you expressed your opinion. .

[Robin Hood]

Another explanation of how governing law clauses work:

https://www.ashurst.com/doc.aspx?id_Resource=4721

Anyway, the basic point is that, if, as Steve Keen asserts, players on the international market insist on these markets being regulated under English law (so why are they happy to trade on the New York and Tokyo markets?), there are ways and means of making this possible.

I accept your word for that but again, as I understood Keens comment, he was referring to a move from the UK to Germany, not trading on International markets. Isn't that what the UK is supposed to be doing at the moment ......... setting up such arrangements with the remaining members of the EU? It is EU regulations that are the problem not the wishes or intent of the UK and the remaining members of the EU.

If they are not doing this or, as PaulZKTV says, they are not allowed to do this, it would be like handing in your notice before looking for another job. Again, it defies common sense!