Financialisation, derivatives, shadow banking, over-leveraged firms, share buy-backs, or the extreme popularity of cryptocurrencies, are just some examples of financial innovations that are touted as a silver bullet of prosperity. At ACT, researchers share a common set of concerns related to the paradigm currently dominating the law of finance. We question the contemporary paradigm that largely reduces the role of law in finance to one of enhancing market efficiency and safeguarding market stability.

Our work currently includes research into the role of banks, investment funds and other intermediaries in the transition towards a more socially and environmentally responsible economy.  We also explore the role and rationale of financial regulation in this endeavour, analysing the extent to which the EU’s sustainable finance action plan has delivered the promised re-engineering of the financial system and repositioning of financial regulation. Further, we analise the effects of increasing financialisation, also in the light of treating companies not as having a goal and purpose of their own, but rather as a bundle of tradable rights, with a focus on companies as a security object.

We explore both the upsides and downsides of wealth distributions as well as loss allocation in case of distress and insolvency. We question the focus on efficiency and value maximization in specific cases, as well as the trade-offs to be made with the protection of legal rights and the safeguarding of the position of weaker parties. We analyze the efficiency of bargaining-based bankruptcy procedures. Additionally, the expansion of the realm of insolvency law and its clash with other means of collective redress, such as mass tort litigation under civil law is a key area of our research.

We approach these subjects from a variety of angles. For example, we investigate the private/public, national/international, coordination/regulation, or hard/soft law distinctions. We distinguish questions of socio-economic growth (i.e. how to make the pie bigger) from questions of distribution (i.e. how to slice the pie and duly share its benefits). Further, we employ a range of methodological approaches, including critical analysis, law & economics and empirical research.

While opting for different entries into this world of finance, we collectively seek to understand and appraise the constitutive role of private law in producing and addressing the growing financialisation of socio-economic and political life. We explore how a transformative financial law, underpinned by a commitment to a broader set of policy goals such as equality, sustainability, and heterodox conceptions of value and development could be institutionalized or otherwise introduced into the financial ecosystem.