Legal Issues On Private Governance In Cross-Border Securitization

In the context of economic globalization, in order to achieve the efficient allocation of financial resources in the global sphere, more and more financial activities go well beyond any single country's political and geographic border. Globalization of financial activities challenge existing regime of nation-state's one-way vertical supervision from above, asking for responsive reform of existing financial supervision regime to transform from government to governance. In the meantime, international law theories are experiencing significant structural reforms, more attentions are paid to subjective status of private persons in international law is generally accepted. In international financial law, private persons play more important roles. With continuing innovation of international financial activities and highly complicated financial transaction structures, countries find it difficult to regulate financial activities promptly, efficiently and effectively, which give professional intermediate agencies more space to participate in setting financial rules and achieve the globalization of financial governance. To some extent, active participation of professional intermediate agencies changes the legal structure of international financial law, and challenge international financial law theories.As an emerging area of international financial activities, cross-border securitization intensely embodies the trend of international financial law. States still play significant supervisory and guiding roles in cross-border securitization area, but by devising transaction structures or formulating general financial standards, professional intermediate agencies such as lawyers, securities rating agencies and accounting standards setting bodies, not only influence existing the effects of domestic or international law, but also dominate the formation of cross-border securitization rule system. In this regard, by using private governance theory, author want to probe the roles of private persons or private agencies in cross-border securitization area, stressing the legal process how private professional intermediate agencies contribute to the formation of cross-border securitization rule system and corresponding normative issues. This dissertation is constructed into five chapters as corpus, in addition to Introduction and Conclusion.In Introduction part, author first defines and explains the research theme, and briefly analyzes existing research achievements. Furthermore, author continues to introduce the basic theory framework and major issues to be explored.In Chapter 1, author first briefly analyzes the basic process of cross-border securitization, figuring out that essential characteristics of cross-border securitization have challenged traditional international legal theory. While nation's legislature and supervision are criticized for its defects such as time-lag, low efficiency and even vacancy in some areas, private persons or agencies, especially private authories play significant roles in facilitating cross-border securitization and providing institutional safeguard for it.In Chapter 2, author analyzes private governance of securities rating agencies. Being private agencies, securities rating agencies acquire the power of setting public rules, which trigger normative problems of private governance of public areas. By analyzing the problems, author comes to discuss NRSRO system, and want to discover how to establish appropriate regimes to prevent the problems.In Chapter 3, author stresses that, as private agencies, accounting standards setting bodies meet the normative paradox of private participation in public market governance. Because of multi principal-agent relationship, accounting standards setting bodies are probably captured by interest groups such as corporations. Author probes into the normative paradox of private agencies setting accounting standards, which covers FASB and IASB. In the end, author continues to discuss that which accounting standards setting model suits China.In Chapter 4, author clarifies the status and influence of lawyers in cross-border securitization, and brings up the concept of Lex Juris, which is compared with Lex Mercatoria. And author concludes that law-making role of lawyers should be recognized to some extent.In Chapter 5, author analyzes the problems existing in the process of private agencies participating in global financial market governance. Participation of private agencies helps to improve efficiency of financial market governance, but faces the normative dilemma which is difficult to settle in traditional theory. But author believes that, functional effects of efficiency improvement of private persons or private agencies may alleviate critics about normative dilemma, and such dilemma can be resolved through process improvement such as keeping process of decision making transparent and information publicly available. In the end, author concludes that, although participation of private persons or private agencies in international financial market governance gives rise to normative problem, and the concept of private law-making are criticized severely, but more tolerant attitude should be taken and recognized limited legislative power of private persons or private agencies in specific areas.