International Law

Even without getting into the scope/depth/existence/possibility of a US or more broad liquidity/credit crunch and/or economic downturn, this is an interesting column from Martin Wolf at the Financial Times on what might happen if there is a real crisis (or, as he frames it, what will happen because of a real crisis that exists now).

It is interesting to think how international economic law and regulation might adjust (or in some cases, be created in relatively unregulated areas) if there are concerns with various housing and credit markets, particularly as these were internationalized and securitized.  Might additional legal regimes be created?  How might claims in the current market play out as they expand to international parties?  If there is a big shift, as Wolf argues, certainly legal claims will follow (and are starting in subprime, as this Economist article notes), along with considerations of new regulatory approaches.  Will responses to any crisis be country-by-country or more universal?  Does it depend on if there is “decoupling” or not?  Certainly some have argued that there will be no decoupling (see, e.g. Nouriel Roubini’s blog) — but that does not mean that responses might not vary between different countries and different actors, as much Roubini hopes for more coordinated approaches.