While extraterritoriality is often bemoaned, this chapter makes the point that it is actually indispensable. If the state wants to maintain its regulatory grip under the conditions of globalization on phenomena such as the internet, it must reach beyond its borders. Without extraterritoriality, its laws could easily be circumvented. Extraterritoriality is therefore nothing else than the state’s response to the growing interconnectedness and interdependence of the modern world. Yet from extraterritoriality springs the more problematic phenomenon of ‘superposing laws’, defined here as the overlap of various mandatory rules that often require contradictory behaviour and result in conflicting duties. The chapter suggests that we should shift the discussion to this issue, arguing that classic public and private international law are incapable of dealing with the problem. Instead, a new path is suggested: enlightened self-restraint by states and the widespread acceptance of substituted compliance.
Given that many banks and financial institutions operate across borders, the success of restructuring and resolution measures is conditioned upon their effects in other jurisdictions. Yet the classic determination of the applicable law through private international law rules poses serious obstacles to the transboundary effect of national administrative orders. This chapter lays out the difficulties in the context of the BRRD and the SRM Regulation, which govern in the EU and the Euro Area, and examines possible solutions. Other laws, in particular those of the US and Switzerland, are taken into account. The chapter concludes that mere regulatory cooperation is insufficient for the judicial solution of private disputes, and therefore suggests that states harmonize their laws by following an international text, such as a legislative guide or a model law, that has to be developed.