This project investigates the relationship between the financial sector and public law. The legal framework of the financial sector is often designed more or less in accordance with regulatory proposals from the discipline of (public) finance as a sub-field of economics. These regulatory proposals often cherish certain expectations on law's capacity to guide behavior. However, law is not always able to meet these expectations. The meaning of legal rules is often open-ended, contingent, and evolves with their context. The project investigates conflicts that emerge from the disappointment of expectations on (public) law as a means to regulate the financial sector.
As public law represents the joint connecting the financial sector with democratic decision-making, this project touches upon the age-old question whether democracy and capitalism can be reconciled. It argues that this is possible if one takes the deliberative dimension of the law more seriously. Law provides substantive, procedural, and institutional algorithms for decision-making. It does not, however, determine the outcome of such decisions in a mechanical way.
The main contribution of the project consists in a monograph by Matthias Goldmann. It will explore the conflicts arising from disappointed expecations on law's regulatory capacity at the example of policy rules and other legal strictures for decision-making in the fields of monetary law, fiscal policy, sovereign debt, banking regulation, and taxation on the domestic, European and international level. It challenges the traditional dichotomy between rules and discretion.
The project has been based at Goethe University Frankfurt since 2016, where it is affiliated with the Research Center SAFE. It is carried out in co-operation with the Max Planck Institute for Comparative Public Law and International Law. Funding is provided by the Volkswagen Foundation (Freigeist Fellowship). A research group at Goethe University contributes to the work of the project.