Legal safeguards and regulatory developments adopted in the context of the 2008 financial crisis

Abstract

Part A of the dissertation describes the role of the United States within the context of the recent financial crisis. It also contemplates the legal and regulatory developments which were adopted by both the United States and the European Union throughout the crisis. The first chapter commences by explaining the different types of residential mortgages in the United States, with the main focus being on subprime mortgages which were the initial trigger to the 2008 financial crisis. It then proceeds to analyse the major causes contributing to the nurturing of such crisis so that it turned into a full blown global upheaval. The second chapter looks at the legislative and regulatory developments which took place both in the United States as well as in the European Union. In doing so, it first addresses regulatory provisions contained in U.S. legislation. This chapter then proceeds to address the EU's response to the financial turmoil, by focusing mainly on regulation and supervision. Part B of the dissertation focuses on Malta's legislative structure in dealing with the financial crisis. Chapter three commences by discussing the way market abuse regulation has evolved in Malta. It also attempts to illustrate the good practices (including the relevant legal instruments) prevalent in the Maltese legal regime that have prevented the crisis from creating any havoc in the Maltese financial market. Chapter four considers certain legal and regulatory developments which took place in Malta as a result of the recent financial crisis. In this chapter, an analysis of the Regulations on depositor compensation as well as capital adequacy is conducted, with particular reference being made to the amendments which took place in 2009. The fifth and final chapter concludes by focusing on the overall impact that the credit crisis has had on local financial institutions and the reasons for such. In doing so, a research study was conducted with the aim of better understanding the extent to which banks in Malta were affected by the financial crisis.