Secured Credit and the Harmonisation of Law
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Secured Credit and the Harmonisation of Law

The UNCITRAL Experience

Gerard McCormack

This is a discerning analysis of international harmonisation efforts for secured credit law and examines the role of globalisation and finance capital in shaping such efforts. Gerard McCormack reveals how an ‘efficient’ law is often seen to increase the availability, and lower the cost, of credit, thereby contributing to international development. He considers whether the most comprehensive international standard – the United Nations Commission on International Trade Law (UNCITRAL) Legislative Guide (2008) – is actually suitable for adoption at the national level. In particular, he examines the hypothesis that American law and lawyers have shaped the content of the Guide to the extent that it is not suitable for translation into other laws.
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Chapter 3: Harmonising and Modernising Secured Transactions Law

Gerard McCormack


The previous chapter looked at the harmonisation and modernisation of international private law in general. This chapter turns the spotlight more particularly on secured transactions, or secured credit law as it is variously called, and asks why harmonise and modernise in this area? In short, UNCITRAL’s view is that this will aid in the cultivation and growth of individual businesses and also in general economic prosperity.1 Harmonisation and ‘modernisation’ are assumed to equal ‘liberal’ security regimes and the facilitation of secured credit. In this chapter, the modernisation equals liberalisation agenda is subjected to greater scrutiny. The chapter begins by asking what is the effect of recognising security rights? In short, what do security rights do for you? The second part asks why harmonise the law of secured credit? The third part considers why ‘liberal’ secured credit regimes are considered to be beneficial. The fourth part considers critical perspectives on the international harmonisation and modernisation agenda. The final part summarises the discussion. SECURITY RIGHTS While there is probably no universally recognised definition of security rights, it is generally taken as meaning something equivalent to a right over property to ensure the payment of money or the performance of some other obligation. The property over which security is taken is referred to as ‘secured’ or ‘collateralised’. The security taker has a superior claim to payment of the debt etc. out of the secured property than the generality of the debtor’s creditors. The security taker will usually have access to speedier enforcement mechanisms...

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