Strategies of Financial Regulation: Divergent Approaches in Conduct of Business Regulation of Mis-Selling in the UK and South Korea

Preface
Acknowledgement
Contents
Abbreviations
List of Cases
UK
South Korea
List of Tables
Chapter 1: Introduction and Research Framework
1.1 The Purpose of the Book
1.2 Theoretical Frameworks
1.2.1 Theoretical Frameworks of Comparison
1.2.1.1 Comparative Law and Its Purposes
1.2.1.2 Methodology of Comparison
1.2.2 Theoretical Framework of Evaluation
1.2.2.1 Different Approaches to Rule-Making and Its Effectiveness
1.2.2.2 Different Approaches to Rule-Enforcing and Its Effectiveness
1.2.2.3 Advantages and Disadvantages of Private Enforcement and Its Effectiveness
1.2.2.4 Regulatory Strategies
1.2.2.5 Explanation of Different Regulatory Strategies
1.2.2.6 Evaluation of Effectiveness
1.3 Structure of the Book
Chapter 2: Rule-Making of COB
2.1 Introduction
2.2 The Overall Structure of Financial Regulation
2.2.1 The Overall Structure of Financial Regulation in the UK
2.2.1.1 The Evolution of Financial Regulation in the UK
2.2.1.2 Current Financial Regulation of the UK
2.2.1.3 Constitutional Constraints of Rule-Making in the UK
2.2.2 The Overall Structure of Financial Regulation in South Korea
2.2.2.1 The Evolvement of Financial Regulation in South Korea
2.2.2.2 Current Financial Regulation in South Korea
2.2.2.3 Constitutional Constraints of Rule-Making in South Korea
2.3 The Regulation of Information Asymmetry
2.3.1 The Rationale for Regulatory Intervention
2.3.2 Regulatory Rules for Information Asymmetry in the UK
2.3.3 Regulatory Rules for Information Asymmetry in South Korea
2.3.4 A Comparison Between the UK and South Korea of the Regulatory Rules for Informational Asymmetry
2.4 Regulation of the Bounded Rationality of Consumers
2.4.1 Rationale for Regulatory Intervention
2.4.2 Regulatory Rules for the Bounded Rationality of Consumers in the UK
2.4.2.1 The Suitability Rule
2.4.2.2 The Appropriateness Rule
2.4.2.3 Product Intervention
2.4.3 Regulatory Rules for the Bounded Rationality of Consumers in South Korea
2.4.3.1 The Suitability Rule
2.4.3.2 The Appropriateness Rule
2.4.3.3 Product Intervention
2.4.4 A Comparison Between the UK and South Korea of Regulatory Rules for the Bounded Rationality of Consumers
2.5 Effectiveness of Rule-Making in the UK and South Korea
2.5.1 Evaluation of Effectiveness
2.5.2 Factors That Influence the Approach to Rule-Making
2.5.2.1 Different Legal Institutions
2.5.2.2 Different Histories of Financial Regulation Development
2.5.3 Compatibility of South Korea with the COB
2.6 Conclusion
Chapter 3: Public Enforcement of COB
3.1 Introduction
3.2 Public Enforcement in the UK
3.2.1 Public Enforcement Cases: ‘Mis-Selling’ of OTC Derivatives in the UK
3.2.1.1 Disciplinary Actions
3.2.1.2 Regulatory Redress Actions
3.2.2 Approach by the UK Regulator to Enforcement
3.2.3 Enforcement Strategy of the UK Regulator
3.3 Public Enforcement in South Korea
3.3.1 Public Enforcement Cases: ‘Mis-Selling’ of OTC Derivatives in South Korea
3.3.2 Approach by the South Korean Regulator to Enforcement
3.3.3 Enforcement Strategy of South Korean Regulator
3.4 Evaluation of the Enforcement in the UK and South Korea
3.4.1 The Causes of Enforcement Failures
3.4.2 Implications from Failure
3.4.3 Further Actions Needed
3.5 A Case Study of Prudential Regulation in Rule-Making and Enforcement
3.5.1 Liquidity Regulation in the UK
3.5.1.1 Regulation Before the Crisis
3.5.1.2 Regulatory Failure: Bank-Run of Northern Rock
3.5.2 Liquidity Regulation in South Korea
3.5.2.1 Regulation Before the Crisis
3.5.2.2 Regulatory Failure in Liquidity Risk Management
3.5.3 Implications from the Regulatory Failures of the Two Countries
3.6 Conclusion
Chapter 4: Private Enforcement of COB
4.1 Introduction
4.2 Private Law in the UK
4.2.1 Private Law in ‘Mis-Selling’ Over-the-Counter Derivatives
4.2.1.1 Major Issues in the Private Law
4.2.1.2 Duty of Care
4.2.1.3 Negligent Misrepresentation
4.2.1.4 Regulation in Private Law
4.2.1.5 Causation
4.2.1.6 Summary of Private Law
4.2.2 Dissonance Between Private Law and Regulation in the UK
4.2.2.1 Different Duties of the Same Activities
4.2.2.2 COB v Fiduciary Duty
4.2.2.3 Different Approaches to Causation
4.2.3 Origins of the Dissonance
4.2.3.1 Different Functions of the Two Institutions
4.2.3.2 Overlapping Roles of the Two Institutions
4.3 Private Enforcement in South Korea
4.3.1 Private Law About ‘Mis-Selling’ Over-the-Counter Derivatives
4.3.1.1 Private Law Before FISCM Act Enactment
4.3.1.2 Private Enforcement After FISCM Act Enactment
4.3.2 Characteristics of Private Enforcement in South Korea
4.4 Evaluation of Effectiveness of Private Enforcement
4.4.1 The UK
4.4.1.1 Standard Setting
4.4.1.2 Monitoring
4.4.1.3 Enforcement and Intervention
4.4.1.4 Summary
4.4.2 South Korea
4.4.2.1 Standard Setting
4.4.2.2 Enforcement and Intervention
4.5 Private Enforcement of Credit Rating Agency Regulation in the UK
4.5.1 Private Law About Negligent Credit Rating
4.5.1.1 Duty of Care to a Third Party
4.5.1.2 Liability of CRAs in Private Law
4.5.2 Regulatory Tort About Credit Rating Assessment
4.5.3 Effectiveness of Private Enforcement of CRA Regulation
4.5.3.1 Standard Setting
4.5.3.2 Monitoring
4.5.3.3 Enforcement and Intervention
4.5.4 Summary and Recommendation
4.6 Conclusion
Chapter 5: Lessons and Recommendation
5.1 Findings from the Case Study
5.2 General Lessons for Rule-Making and Enforcement
5.3 Recommendations for the UK and South Korea
5.3.1 UK
5.3.1.1 Regulation as the Minimum Requirement in the COB
5.3.1.2 Relaxed Causation Test
5.3.2 South Korea
Bibliography
Index