Subjects:

Banking and Finance

Contents:

Introduction

Part I: History

1 A Landmark Case and its Aftermath

2 A Case of Conceptual Impossibility

3 Settling Differences

Part II: Characteristics

4 Definition

5 Sources

6 Causation

Part III: Examples

7 Property Interests in Indirectly Held Investment Securities

8 Vague Laws

9 Re-characterization

Part IV: Management

10 The Essentials of Legal Risk Management

11 Lawyers' Responsibility for the Management of Legal Risk

Part V: Conclusions

12 A 'Risk-Based Approach' to Law

This timely new book explains 'why' and 'how' the concept of legal risk has achieved such prominence in the financial markets and how it is intended to be addressed in the context of operational risk in light of the new Basel II regulatory regime.

McCormick traces the origins of legal risk as a phenomenon in the global financial markets, particularly in the UK market, addressing how concerns about legal risk have been dealt with in light of landmark cases such as Hazell v Hammersmith & Fulham and Re Charge Card and the formation of The Legal Risk Review Committee by the Bank of England. He looks at the principal components of legal risk, i.e. litigation/regulatory action risk and defective documentation as well as related risks, such as reputational risk and political risk.

Analytical consideration is given to current and recent legal risk concerns (in relation to e.g. conflicts of interest, securities held through intermediaries, compliance with anti-terrorism/money-laundering laws, settlement risk etc.) as well as older issues regarding the efficacy of close-out, and multilateral, netting arrangements and insolvency set-off and related legislation and case law. The book also features a section on the management of legal risk, the role of in-house counsel and compliance and the related regulatory aspects.

• The only book of its kind on this topical issue
• Timely publication ahead of the new Basel II regime
• Considers practical issues concerning management of legal risk
• A highly respected author and name in financial law