The European Alternative Investment Fund Managers Directive (AIFMD) - an appropriate approach to the global financial crisis?

Bernhardt, Thomas (2013) The European Alternative Investment Fund Managers Directive (AIFMD) - an appropriate approach to the global financial crisis? LL.M(R) thesis, University of Glasgow.

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Abstract

The European Alternative Investment Fund Managers Directive (AIFMD) has been formulated as a response to the global financial crisis, which climaxed in the collapse of Lehman Brothers on 15 September 2008. Although many financial analysts expected such a crisis in the US for some time before that incident, its transnational dimension has ex-ceeded the expectations of many market participants and stakeholders. The securitisation of real estate risks that came about by the launching financial innovations such as asset-backed securities (ABS), mortgage-backed securities (MBS), collateralised debt obligations (CDO) or structured investment vehicles (SIV) contributed to the fast worldwide cir-culation of ‘poisoned’ papers. It is questionable whether any legal response to the recent financial crisis should single out the abovementioned or other related financial innovations. Until the outbreak of the financial crisis of 2008/2009, the alternative investment segment and the private equity segment in particular, was not regulated in the European Union (EU) in a targeted and spe-cific way. The UNCITS Directive is primarily addressed to small (portfolio) investors and captures, not institutional strategic or financial investors. Thus, the European Commission as the European legislator does not avail itself of real, resilient experience that could con-tribute to a proportional, sustainable and path-breaking response to the financial crisis of 2008/2009. A strong private equity segment seems almost indispensable for the steady credit supply of an increasing part of the real economy and the consolidation of young, growth or strategically repositioned corporations that need a well-functioning access to capital. Assuming that the financial crisis of 2008/2009 was the consequence of wrongfully set incentives that primarily concerned the fund managers’ remuneration, the European Com-mission followed the ideas of Jacques de Larosière, Klaus-Heiner Lehne and Poul Nyrup Rasmussen and set the legal focus on the fund managers, as these entities launch and dis-tribute financial products such as those mentioned above and also decide on the investment strategy that might bear systemic risks. Due to their financial market potential and in view of the design of financial products, these entities admittedly have a strong impact on the financial market development and may jointly be responsible for the realisation of systemic risks of transnational dimensions. In particular, in the view of a steady credit supply of the real economy, the enormous transnational mobility of capital and the global competition of financial market regulations, it seems doubtful whether one can identify the fund managers as those responsible for the financial market crisis of 2008/2009. This thesis highlights the history, symptoms and supposed core reasons of the financial crisis of 2008/2009 and criti-cally assesses whether the AIFMD can reach its objective to effectively contain systemic risks in the context of a globalised financial system.

Item Type: Thesis (LL.M(R))
Qualification Level: Masters
Keywords: European Alternative Investment Fund Managers Directive (AIFMD) Financial Market Crisis 2008
Subjects: K Law > K Law (General)
Colleges/Schools: College of Social Sciences > School of Law
Funder's Name: UNSPECIFIED
Supervisor's Name: Walker, Prof. George
Date of Award: 2013
Depositing User: Thomas Bernhardt
Unique ID: glathesis:2013-4546
Copyright: Copyright of this thesis is held by the author.
Date Deposited: 12 Sep 2013 07:22
Last Modified: 15 Jan 2015 09:59
URI: http://theses.gla.ac.uk/id/eprint/4546

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