Andreas Kokkinis - Corporate Law and Financial Instability

Dr Kokkinis book reminds us of the importance to critically question the shareholder primacy model in corporate governance especially when certain public interests are at stake in how important corporations are governed. It is very much aligned with UK financial regulators view that senior managers should be made more responsible for public interest objectives, charting a unique path away from religious adherence to shareholder primacy.

Dr Iris H Chiu Professor of Corporate Law and Financial Regulation at UCL

For too long, corporate and banking law have remained mutually distinct subject areas. This was illustrated by the markedly differing academic and policy discourses in these fields following the financial crisis. In this ground-breaking and thoughtprovoking work, an author who is equally well-versed in both specialisms provides a lucid, compelling and conceptually sophisticated exposition of why prudential bank regulation is incapable of resolving financial stability concerns in the absence of supportive corporate law reforms. Kokkinis polemic is at once both radical and common-sense. Above all, it calls on academics and policymakers to recognise the potential of corporate law to act as a powerful public policy mechanism in the financial domain.

Dr Marc Moore Reader in Law at Cambridge University

Virtually all large banks and other financial institutions in the UK and internationally are public limited liability companies whose shares are listed on one or several stock exchanges. As such, their corporate governance and, in particular, the incentives faced by their directors and senior managers are to a significant extent determined by corporate and securities law rules such as directors duties, directors liability in insolvency, takeover regulation, disclosure obligations, shareholder rights and rules on executive remuneration. At the same time, systemically important financial institutions in the UK are licensed, regulated and supervised by the Prudential Regulation Authority (PRA).

This book explores the relationship between, on the one hand, the broader corporate law, corporate governance and securities law framework and, on the other, the prudential regulatory framework. Although the books main focus is on UK law, much of the policy argumentation is relevant globally and therefore appropriate international comparisons are drawn, and analysis of EU law and regulation is included. The book argues that the corporate law regime, which focuses on shareholder empowerment and profit maximisation, operates as an antithesis to prudential regulatory objectives thus undermining the safety and soundness of banks and other financial institutions by encouraging risky behaviour that may be in the best interests of their shareholders, but is clearly not in the public interest.

Andreas Kokkinis is Assistant Professor at the School of Law of the University of Warwick, UK.

Routledge Research in Corporate Law

Available titles in this series include:

Rethinking Corporate Governance in Financial Institutions

Demetra Arsalidou

Board Accountability in Corporate Governance

Andrew Keay

Piercing the Corporate Veil in Latin American Jurisprudence

A Comparison with the Anglo-American Method

Jose Maria Lezcano

Legal Approaches and Corporate Social Responsibility

Towards a Llewellyns Law-Jobs Approach

Adaeze Okoye

Disqualification of Company Directors

A Comparative Analysis of the Law in the UK, Australia, South Africa, the US and Germany

Jean Jacques du Plessis and Jeanne Nel de Koker

Beyond Shareholder Wealth Maximisation

Towards a More Suitable Corporate Objective for Chinese Companies

Min Yan

Corporate Law and Financial Instability

Forthcoming titles in this series include:

Behavioural Risks in Corporate Governance

Regulatory Intervention as a Risk Management Mechanism

Ngozi Vivian Okoye

Regulation and Inequality at Work

Isolation and Inequality Beyond the Regulation of Labour

Vanisha Sukdeo

Corporate Law and Financial Instability

Andreas Kokkinis

First published 2018

by Routledge

2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN

and by Routledge

711 Third Avenue, New York, NY 10017

Routledge is an imprint of the Taylor & Francis Group, an informa business

2018 Andreas Kokkinis

The right of Andreas Kokkinis to be identified as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging in Publication Data

Names: Kokkinis, Andreas, author.

Title: Corporate law and financial instability / Andreas Kokkinis.

Description: Abingdon, Oxon [UK] ; New York : Routledge, 2017. |

Series: Routledge research in corporate law | Includes bibliographical references and index.

Identifiers: LCCN 2017028448 | ISBN 9781138289130 (hardback) | ISBN 9781315267340 (ebook)

Subjects: LCSH: Corporation law-Great Britain. | Stockholders-Legal status, laws, etc.-Great Britain. | Private companies-Great Britain. | Corporations-Finance-Law and legislation-Great Britain. | Corporation law.

Classification: LCC KD2079 .K65 2017 | DDC 346.41/066dc23

LC record available at https://lccn.loc.gov/2017028448

ISBN: 978-1-138-28913-0 (hbk)

ISBN: 978-1-315-26734-0 (ebk)

Dedicated to my late uncle, Sotirios, and to the study of the Greek social security system that he never had time to write due to his untimely demise.

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