International financial law and the new sovereignty: legal arbitrage as an emerging dimension of global governance

Dr Jorge Guira, University of Warwick

The last few years have witnessed several significant trends affecting international capital markets, international banking, and investment funds regulation. Companies who understand the rules but fail to make the connection between the rules and the advantages that they can get in the marketplace by applying them skilfully limit their competitiveness. Sovereignty, essentially defined by Professor Abraham Chayes and Antonia Handler Chayes as the inclusion or participation of a state in a legally based framework of power, is not a static concept. ¹ Indeed, as a logical corollary, to the extent that a state takes actions that will bring it greater wealth (economic power) and political power generally within such a legal framework, then it may ordinarily be expected to have greater sovereignty in the international legal system. Further, mutuality – including mutual recognition between states – is a second component of this new sovereignty. ²