ABSTRACT

The European legal framework for financial services does not provide a coherent regulatory policy for liability. Instead, various specific rules apply. In this chapter, we examine the different approaches to liability in current European financial market regulation and consider whether new liability concepts should be developed in light of regulatory objectives. The European objectives of financial stability and client protection suggest that questions of liability should be addressed at the European level. But the current fragmented treatment of liability is inappropriate. Having considered the characteristics of current approaches to liability, our focus turns to some of the challenges to be faced in developing liability rules in European financial market regulation. European financial market regulators particularly need to develop liability concepts that address safety issues related to the use of new technologies in financial services.