The series of crises started with the global financial crisis that gained speed with the collapse of Lehman Brother in Autumn 2008. The ECB as any other major central bank became deeply involved in solving the crisis, which had eroded banks’ ability to trust each other. The ECB provided increasing amounts of liquidity to banks, and in many ways replaced interbank markets with its own operational framework. Other exceptional measures included easing and expanding of accepted collateral, purchases of high-quality covered bonds issued by banks. The constitutional analysis culminated on the question, whether the ECB measures can be classified as monetary policy. Generally, the provision of liquidity, even in some unusual forms, and its rationales were even classical monetary policy and similar to other central banks. The main objective was stability and sufficient liquidity in the euro area financial markets. The ECB did not give financial assistance to a Member State or their banks, and its independence was maintained. Only the later three-year LTROs could be assessed somewhat differently.

Since the 1997 handover to Mainland China, Hong Kong has endured pandemics, recessions, and financial crises. Hong Kong’s financial supervisory architecture performed relatively well following the speculative attacks on the Hong Kong dollar and the Hang Seng Index during the 1997–8 Asian Financial Crisis, the liquidity crunch in the 2008–9 global financial crisis, and the economic shutdown from the Covid-19 pandemic. There have been no major supervisory failures or financial instability despite several international financial assessments and reviews recommending structural reforms. This chapter argues that these recent crises call for Hong Kong’s financial supervisory architecture to reflect on the financial system, rather than wait for a market failure to incentivize a redesign. The ongoing financial system integration with Mainland China is placing more reliance on supervisory coordination and cooperation to manage financial stability. Hong Kong is critical to Mainland China’s financial market liberalization and internationalization which will be a key driver of financial market growth in the future. As an international financial centre, Hong Kong is actively involved in market and regulatory developments. Hong Kong has taken a leading role to ensure its financial markets evolve and are fertile to embrace prevailing market trends.

This chapter considers the response of European authorities (both EU and Member State) to the 2008 financial crisis. It first considers the background to the financial crisis, particularly regarding how banks and other financial institutions shifted in the way in which mortgages were sold throughout the financial system. The second section uses the 2007 failure of the UK’s Northern Rock as an illustration. The third section examines the events of autumn 2008. It examines state aid regimes put in place not only to reintroduce stability into the financial system, but also to aid the recovery of the real economy. The fourth section considers merger policy in the financial crisis. In two Member States, the UK and the Netherlands, the competition authorities approved mergers that further concentrated already concentrated markets. We suggest that governmental responses to mitigate the consequences of the programme, via aid packages, were the appropriate response to mitigate the effects of this failure. However, a more lenient approach to merger control in the financial sector, which was seen in some Member States, was an inappropriate response.

Iceland is a country of rugged beauty, volcanic mountains, countless waterfalls and, well, ice. Its inhabitants are even more exotic; 54 per cent of Icelanders, for example, believe in elves – or say it’s possible that they exist. Travelling through the desolate landscape, one can easily imagine how such beliefs emerge: Iceland is a country with fewer than 400,000 residents. To put that in perspective, almost double the number of people live in the 33 square kilometres of Macau than in the 100,000 square kilometres of Iceland.

Iceland might seem like a strange place to start a story about the largest global financial crisis since the Great Depression. But Iceland exemplifies both the worst and best of the crisis. The story begins several years before 2008, when Iceland’s bank managers saw an opportunity: they could attract the savings of Europeans, mostly residents of England and the Netherlands, by offering interest rates higher than those of the banks of those countries.

A Financial History of Western Europe is Kindleberger’s self-identified masterwork, an attempt to derive robust theories from centuries of accumulated fact, and then to use those theories as a framework for making sense of the momentous events of Kindleberger’s own life. It is a story of financial development in support of economic development at a global scale, both development processes advancing together in Darwinian evolutionary fashion by means of boom and bust.

This chapter explores the political, social, and economic conditions that have shaped the turn to history since the 1990s. Those conditions include the break-up of the Soviet Union and the ‘end of history’ narrative that accompanied a decade of ambitious liberal expansionism, the crisis of liberal internationalism triggered by the war on terror and the financial, energy, food, asylum, and climate crises of the early twenty-first century, and the shift in geopolitics caused by the rise of the BRICS and particularly of China as an economic power. International lawyers in practice and the academy have drawn on past events, practices, records, and cases as argumentative resources in adjudicatory settings and in broader debates over how to understand, justify, or resist the transformation of international law. The turn to history eventually began to be understood as a project that should be distanced from the argumentative practice of international law and measured against the empiricist protocols of academic historians. This chapter returns it to the context of international legal argumentation from which it arose, in order to gain a better understanding of the turn to history as an intervention in present struggles over the meaning of international law.

We provide an overview of the monetary policy failures that resulted in the 2007–2008 financial crisis and ensuing Great Recession, focusing on the United States. Before the crisis, monetary policy was too loose, which fueled the bubble. After the bubble burst, monetary policy became too tight, hindering the recovery. These failures are fundamentally due to the Federal Reserve’s discretionary monetary policy. Furthermore, the popular approach of “constrained discretion” is really just discretion. Hence, it is sensitive to all the usual problems with discretionary monetary policy. Only firm monetary rules, ones that actually bind, can maintain macroeconomic stability and prevent crises.

Financial crises are widely perceived to be the reason monetary rules cannot work. The extraordinary challenges posed by crises require policymakers to act discretionarily. We show that this argument is not only wrong but backward: It is more important than ever to have true rules for monetary policy, which actually bind, to cope with financial crises. We show how the Fed failed to respond appropriately to the 2007–2008 crisis. Contrary to the then chairman Bernanke’s public statements, the Fed did not behave as an orthodox lender of last resort. Instead, it experimented with dubious policies that further entrenched moral hazard in the financial system. We criticize these policies, as well as an approach to economics, which we call “triage economics,” that mistakenly supposes the basic rules of price theory provided no guidance in crafting policy responses to crises. A rules-based approach to monetary policy is thus consistent with extreme market turbulence. In fact, rules are how such turbulence is pacified.

The introuduction lays out the book’s main concerns, core arguments, historical, theoretical and theatrical scope, and interdisicplinary and materialist approach. It argues that the theatres analysed in the rest of the book, when taken together, deliniate a theatre that is increasingly taking up the mantle of the mixed economy: to combine economic efficiency with social security, while promoting liberal democracy. This has occured during a period when the mixed economy has been in electoral and ideological decline. This introduction also argues that the theatres examined in subsequent chapters play three key roles within their market economies: as enactments of the real economy in economic contexts that have become increasingly dominaed by finance capital and rent-seeking; as spatial fixes to productivity problems arising both within theatre and in the wider political economy; and as localisation machines, as apparatuses that render otherwise intangible of remote political and economic relations concrete and proximate.

Chapter 2 explores the productivity of performance through two adjacent, but very different sites on London’s South Bank: the collection of monumental arts centres clustered along the River Thames – especially the National Theatre – and the tunnels under Waterloo Station that have more recently been refashioned as performance venues. While the South Bank has for decades been defined by its massive, purpose-built vestiges of Britain’s welfare state, since 2009 it has been supplemented by a site only partly repurposed from its former use as a store for railway equipment. As this chapter discusses, live performance has historically been seen as unproductive in classical and contemporary economic thought. But if we observe performance through its socio-spatial infrastructure rather than its labour process, a more productive theatre emerges. This chapter suggests that contemporary London theatre has salved its productivity problems by spatialising and socialising them. And the South Bank suggests that London’s own productivity problems – made significantly worse by the financial crisis of 2008 – might in turn be solved, even if only temporarily, by theatricalising them.

‘Over-the-counter’ (‘OTC’) derivatives have attracted unprecedented levels of scrutiny since the global financial crisis which broke out in 2007–8. Yet this would be the wrong place to start in order to understand the modern derivatives markets and the courts’ role in relation to them. This chapter argues that in order to understand post-crisis developments in the OTC markets, including the unprecedented surge of litigation after 2008, it is necessary to place these developments in historical, legal and regulatory context. Having set out important definitions and discussed the main uses of derivatives by way of introduction, the chapter explores the evolution of the modern derivatives markets, highlighting the particular significance of contractual standardisation and market diversification.

The previous chapter explored the pivotal role of the ISDA Master Agreement in the evolution of the OTC derivatives markets and highlighted the combination of legal techniques behind the various ‘self-help’ remedies in this contract. These contractual remedies, which culminate with Close-out, are designed to manage disruption arising during the lifespan of a derivatives contract without requiring recourse to the formal procedures associated with enforcing rights under general law. While versions of these self-help remedies appear in many types of financial contracts, including in market standard syndicated loan agreements and in the terms and conditions of debt securities, they have reached unmatched levels of sophistication in the derivatives context. As such they have been referred to in a recent English case as amounting to ‘an exclusive code’ under which parties manage the implications of a breach of contract, to the exclusion of the general law. As is now well-documented in the literature addressing the transnational qualities of modern finance, these arrangements underpin the cross-border markets in OTC derivatives by promoting autonomy from national insolvency law, a strategy which has, in turn, enjoyed generous regulatory treatment. The questions to which this chapter now turns is what role is left for the courts in relation to such a tightly designed, closely maintained and ‘exclusive’ contractual framework, and, as a starting point, why such litigation arises in the first place.