Debt Capital Markets : Law, Regulation, and Policy

A critical and detailed analysis of the evolution of the current law and regulation of debt capital markets both in the EU and globally.

Debt capital markets have been at the heart of regulatory and policy debates since the global financial crisis of 2008. In this work, Vincenzo Bavoso explores the role financial markets and products have in fuelling episodes of crises and financial instability. Focussing on the law and regulation, but also drawing on current economics and finance scholarship, Debt Capital Markets examines both the pre-2008 regulatory environment, and the framework that has emerged from post-crisis regulatory corrections since. Charting the evolution of debt capital markets and the transformation and liberalisation of the financial markets throughout the 1980s and 1990s, the book outlines how debt capital markets - from bonds to more sophisticated forms of securitised credit - have become engines of private debt creation, excessive levels of leverage, and inevitably, financial instability. It covers all the main channels of debt intermediation in capital markets (bonds, commercial paper, covered bonds, securitisation, collateralised debt obligations, collateralised loan obligations), and explains relevant synergies with adjacent markets and products (such as credit derivatives, repurchase agreements, or FinTech lending). Bavoso argues that the regulatory response after the 2008 global financial crisis has been insufficient so that debt capital markets remain the main locus of financial instability today. His book provides a complex analysis of financial markets that accounts for theoretical, practical, and regulatory aspects. It provides a multifaceted and contextual appraisal of the role of debt capital markets, together with the legal and regulatory challenges posed by their development.