Chapter 28: International Harmonisation of Credit and Security Laws: The Way Forward
Orkun Akseli* I. Introduction The law of credit and security is at the core of commercial law. It has been traditionally regulated by domestic rules and interwoven throughout the law of property, contracts and corporate finance where the capital may be raised through borrowing.1 However, with increasing market interdependency as a result of globalisation of financial markets, there is a commercial necessity in harmonising credit and security law at the international2 level. The recent financial crisis clearly demonstrates that globalisation of financial markets must be accompanied by globalisation of the law of credit and security. Harmonisation of credit and security laws could substantially assist in reducing the cost of credit by creating certainty in cross-border financing transactions. Financing techniques such as raising finance against company assets and by assignment of receivables are important and their regulation varies under different jurisdictions which limit access to low cost credit. Facilitated access to low cost credit is said to drive economic growth, according to studies conducted by the World Bank.3 There is a correlation between the facilitation of credit and lowering the * Senior Lecturer in Commercial Law, Durham University Law School, UK. For a similar statement see Dahan, F (2000), ‘Secured Transactions Law in Western Advanced Economies: Exposing Myths’, Law in Transition 37, 39. 2 In this chapter international harmonisation is used to express the idea of international or global harmonisation under the auspices of international organisation such as UNCITRAL or Unidroit (as opposed to regional harmonisation) and international activities intended to have...
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