Imagine. We are in 2023, a Portuguese bank going bankrupt. For several years, the european Union (EU) has developed a specific regime to manage bank failures and to avoid contagion. And yet, the legal battle for the compensation of accounts payable is happening… in London, before a court of justice, which is not in the EU.

The scenario is far from unimaginable : according to calculations of the japanese bank, Nomura, at least 127 billion euros of bonds by banks in continental Europe are currently governed by English law, one-third of the existing stock. The English justice system has an excellent reputation around the world and a lot of international investors prefer that their financial products are written in the customary law.

To avoid such an event that would be politically embarrassing, instances of european financial looking for the Brexit to redress the balance. “We are seeing a pressure informal regulators to ensure that new obligations of banks are issued in the law of the local country,” said Emil Petrov, head of capital markets at Nomura. According to him, the French banks are already fully past in French law, so that they were once part of in English law. “But the question is going to be more complicated for Italian banks, Portuguese and Greek, he says. International investors will be willing to trust the local law of these countries ? Nobody expects to see Italian banks to issue bonds in local law under the current regime… ”

A battle is much more wide

This example is the small end of the telescope of a battle much larger, which began with the Brexit. The whole of the legal sector will feel the impact of the exit of the Uk from the european Union. As in finance, London currently dominates very…