Martin S. Navias - Finance and Security: Global Vulnerabilities, Threats and Responses

FINANCE AND SECURITY

First published in the United Kingdom in 2019 by

C. Hurst & Co. (Publishers) Ltd.,

41 Great Russell Street, London, WC1B 3PL

Martin S. Navias, 2019

All rights reserved.

Printed in the United Kindgom

Distributed in the United States, Canada and Latin America by Oxford University Press, 198 Madison Avenue, New York, NY 10016, United States of America

The right of Martin S. Navias to be identified as the author of this publication is asserted by him in accordance with the Copyright, Designs and Patents Act, 1988.

A Cataloguing-in-Publication data record for this book is available from the British Library.

ISBN: 9781787383579

This book is printed using paper from registered sustainable and managed sources.

www.hurstpublishers.com

For Gabriel and Eve

Security can mean very different things to different people. Both finance and defence professionals frequently employ the term but the concepts to which they are referring are essentially distinct.

When bankers, lawyers and others involved in finance discuss security they are often describing the process whereby a creditorfor example a bankwill take a legally recognised stake in the assets of a borrower. Should that borrower fail to perform its contractual obligations to the bank, such as repaying a loan, then the bank has a right to appropriate those assets in order to make good monies owed to it by that borrower. In support of this process, English law, for example, recognises several types of legal securitymortgages, charges, pledges and liensbut the types of legal and commercial security that can be created vary by jurisdiction. Concomitantly, in a financial context, a security may also refer to a tradable financial instrument that has monetary value. Securities here may be classified as equity securities such as shares and debt securities such as bonds and debentures.

In the fields of war studies, international relations and politics, security carries a totally unrelated connotation. It can mean national and personal well-being, concepts that the layman can readily appreciate but which also have a particular sense and construction within the defence and security space. Thus, the security of the nation state is a service usually primarily provided by a government which develops policies, strategies and forces to protect its institutions, its economy and its populace against a range of military, non-military, conventional and non-conventional threats.

These two communities, finance professionals and defence and security professionals, often work in parallel realms with little overlap and rare meeting. However, certainly since the 11 September 2001 terrorist attacks on the United States, the international finance community has increasingly been tasked by the state to help defend the financial system against a range of emerging global threats. Similarly, the security community has found itself drawn further into the world of finance as the global financial system has been recognised not only as a critical node of state power and national interest, but also as one of acute vulnerability.