Abstract Due to the emphasis placed on implementing confidentiality in arbitration, arbitration has become an important tool for settling international trade and investment disputes. Confidentiality constitutes a procedural guarantee for litigants without which arbitration cannot be envisaged. This is despite the demands to apply transparency to some issues related to international investment arbitration. To achieve its objectives, the study was divided into sections that dealt with the nature of confidentiality in commercial arbitration, the subjective and objective rationalizations that compelled arbitrators to staunchly adhere to the principle of confidentiality, and the issues that made the principle of confidentiality an impediment to international investment arbitration which generated serious calls to implement the principle of transparency. The study also defines the concept of confidentiality by distinguishing it from privacy, as misunderstandings surrounding the nature of these two concepts have confused confidentiality mechanisms. A further emerging trend that runs counter to the dominant idea of absolute confidentiality in arbitration resulted from the continuous international demand to give transparency a prominent role over confidentiality in investment arbitration. This trend also calls for a clear arbitration process that allows the public to participate in access the investment arbitration proceedings and assess their legitimacy and transparency. The United Nations Commission on International Trade Law has initiated a “paradigm shift” in arbitral proceedings by passing rules regulating the transparency of investment arbitration work: the “UNCITRAL Rules on Transparency in Treaty-Based Investor-State Arbitration” adopted in 2014. In this context, this study seeks to analyse the principle of transparency and balance it with the principle of confidentiality of international investment arbitration.
This paper examines changes in capitalism's dynamic structure that have brought international investors increasingly to rely on just three U.S.-based credit rating agencies for their assessments of the risk raised from a wide range of entities, including sovereign states, corporations, and the securities and securitisations they issue. Recent research from multiple disciplines shows how a dramatic increase in investor demand for ratings since the early 1980s, combined with internal constraints on governments and corporations to secure low interest rates, has inadvertently bestowed rating agencies with the power to circumscribe both the policy decisions of elected representatives and the strategic decisions of corporate leaders. Analyses of the criteria on which rating agencies base their assessments of the likelihood of future default expose the divergence between investor interests and two core components of liberal orthodoxy: democratic sovereignty and free market competition.
Kim et al. (2024) have done a valuable service to the intellectual development of accounting by their serious attempt to grapple with Yuji Ijiri's "fairness question." The purpose of this comment is not to take issue with their effort but to indicate that Ijiri's formulation of the fairness question along with his claim that accountability was the foundation of accounting creates considerable ambiguity with respect to what indeed the question of fairness pertinent to accounting is. The comment argues that "fair flow of information" is problematic since it strives to maintain two metaphors for accounting's purpose - information and accountability - that leads to the incoherence described in the critical accounting literature. Accounting is a particular kind of information so if accountability is indeed the foundation of accounting, then it is argued that accounting has an important role in making society fairer. That is that accounting is not simply a technical discourse about decision useful information (which can be anything) but is an explicitly moral discourse requiring explicit consideration of fairness.
Zs & oacute;fia Barta and Alison Johnston's recent book, Rating Politics, delves into the role that politics and policy play in the process of sovereign ratings. In this short review, I discuss its main arguments, drawing particular attention to the author's remarkable attempt at recovering the political thought of 'sovereign raters.' I then raise some concerns regarding the potential limitations of their findings, and the blindspots of the type of political economy at work in this project.
The key aim of this article is to systematically present and analyse the provisions of the European Commission's proposal for a Regulation of the co-legislators (European Parliament and Council) "on the establishment of the digital euro" relating to the dual limits to the use of the digital euro. It is structured in four sections: Section 1 briefly develops on the theoretical and the global context relating to the central bank digital currencies (CBDCs) and then discusses the initiatives undertaken by the ECB on the digital euro project and on the Commission's legislative proposal of 28 June 2023 within the system of its legislative "Single Currency Package". The following two Sections (Sections 2 and 3) develop, respectively, on the specific provisions of this proposed legislative act on the limits to first, the use of the digital euro as a store of value and second, the fees on digital euro payment services. Section 4 concludes.
IFRS 8 "Operating Segments" and the UK Reports on Payments to Governments Regulations (UK RPGR 2014 No. 3209) both produce geographically disaggregated information, yet they embody different regulatory logics and serve distinct constituencies. IFRS 8's management-oriented, business-model approach governs geographic segment reporting (GSR), while the UK RPGR mandates public Country-by-Country Reporting (CbCR) of extractive payments (EPD) to enhance accountability and governance in resource-rich contexts. This study investigates whether mandatory EPD adoption is associated with changes in GSR practices among UK-listed extractive multinationals. Using hand-collected data over 2010-2021, we document consistently high compliance with EPD requirements and substantively more detailed country-level information in EPD reports than in IFRS-based segment notes. Panel regressions indicate that mandatory EPD adoption is not systematically associated with changes in geographic segment aggregation or disclosure extent. The findings point to an institutional decoupling between public transparency regimes and international accounting standards. This has policy relevance for the International Accounting Standards Board, European regulators, and civil society advocates, underscoring limits of current segment reporting frameworks and the need for coordinated approaches to geographic transparency.
Many proposals for the design and implementation of digital wallets assume that the purpose of the wallet is to enable offline payments via custodial accounts, ignoring the real problems faced by individuals and businesses that engage in retail payments, such as the anticompetitive behaviour of payment platforms and the decline of cash. More importantly, the proposals ignore the raison d'& ecirc;tre of digital currency as a kind of digital money that can be held independently of custodians. Finally, the proposals demonstrate a profound lack of imagination about the nature of digital money and the devices that could be used to hold, manage, and exchange it. From these presumptions flows a set of architectural requirements that stifle the promise of digital currency to deliver novel and efficient ways to exchange value in the digital economy. In this article, we critically assess the essential problems that digital currency solutions are being proposed to solve, particularly with respect to the future of payments and the future of cash. We evaluate the validity of common justifications for account-based payments and certified hardware in the context of alternative designs, limitations, and trade-offs. We conclude, referencing some specific designs, that the interests of consumers would be better served by design approaches to digital currency that anticipate that digital assets would be held outside accounts, stored offline, but transacted online, without requiring the use of trusted hardware.
This paper offers an in-depth literature review of the role of digital technology in the tax ecosystem, investigating its reciprocal relationships with corporate tax avoidance. We combine an integrative literature review (ILR) with the ecosystem approach to analyse 38 recent papers addressing the effects of digital technology on: (i) corporate tax avoidance; (ii) tax authorities in counteracting corporate tax avoidance; and (iii) the reverse outcome, where digital technology growth is driven by tax avoidance. The review shows that digital technology affects corporate taxpayers and tax collectors differently and reveals interdependence among contexts (accounting, law, and economics) in explaining these outcomes. Digital technology creates both challenges and opportunities for tax accounting and regulation, influencing transparency and the likely effectiveness of tax law provisions. The literature also documents reverse causality, whereby tax policies can induce growth in the adoption of digital technology. Permanent establishment, Digital Services Tax, Common Reporting Standard, eXtensible Business Reporting Language, blockchain technology, cryptocurrencies, e-commerce, digital finance, and digital transformation are particularly key technologies addressing corporate tax avoidance. This review contributes to tax research by integrating literature that provides evidence across tax accounting, tax law, and tax policy and economics. It also clarifies research gaps, highlighting a new stream of studies on 'digital tax research' and offering a comprehensive understanding of the role of digital technology in the tax ecosystem.
This commentary proposes to address questions raised by projects to establish central bank digital currencies (CBDCs), in response to the contributions to the book edited by Filippo Zatti and Rosa Giovanna Barresi and titled 'Digital Assets and the Law'. The first question concerns the relation between CBDCs and notions of state sovereignty and the public good. The second question concerns the relation between money and data in a context where technological companies increasingly influence the role of banks in credit distribution and monetary creation. The third question concerns the place of CBDCs in global hierarchies.
In order to design an ideal financial infrastructure, we must preserve the benefits of modern monetary system while effectively utilizing innovative technologies. The current system, with its two-tiered structure of a central bank and commercial banks, supports market-based financial intermediation and elastic supply of money. This is underpinned by the fractional reserve system, banks’ credit creation, banking regulation and deposit insurance. Given that retail Central Bank Digital Currencies (CBDCs) and stablecoins could impact the functions of this modern monetary system, discussions around them often overlap with the “narrow banking” debates of the 20th century. Based on these considerations, tokenized deposits have been developed to maintain the advantages of the two-tiered monetary system while integrating blockchain and distributed ledger technology. Since both digital currencies and digital assets are forms of “digital tokens” that adopt common technologies, it is crucial to establish seamlessly-connected platforms for comprehensively handling transactions of both digital currencies and digital assets.
In order to design an ideal financial infrastructure, we must preserve the benefits of modern monetary system while effectively utilizing innovative technologies. The current system, with its two-tiered structure of a central bank and commercial banks, supports market-based financial intermediation and elastic supply of money. This is underpinned by the fractional reserve system, banks' credit creation, banking regulation and deposit insurance. Given that retail Central Bank Digital Currencies (CBDCs) and stablecoins could impact the functions of this modern monetary system, discussions around them often overlap with the "narrow banking" debates of the 20th century. Based on these considerations, tokenized deposits have been developed to maintain the advantages of the two-tiered monetary system while integrating blockchain and distributed ledger technology. Since both digital currencies and digital assets are forms of "digital tokens" that adopt common technologies, it is crucial to establish seamlessly-connected platforms for comprehensively handling transactions of both digital currencies and digital assets.
This article provides an overview of the current status of the Japanese government's and the Bank of Japan's examination of Digital Yen, and discusses some of the legal issues that must be resolved before the Digital Yen is actually issued, with a focus on private law issues. Although many issues would be resolved by applying the existing legal doctrines formed in connection with bank transfers and existing digital money, some issues would require further statutory reform in Japan.
Since September 2022, the US Federal Reserve, the central bank of the United States, has been incurring realised losses. Generally speaking, analyses take a balance sheet perspective which assesses losses as the difference between assets, liabilities and respective returns. This note develops an income statement perspective which points to operational costs, transactions with financial institutions and transactions with the US Department of the Treasury (US Treasury), shedding light on central banking as a public-private partnership which operates as Treasury issue bank, banks' bank, and foreign exchange agency. Accordingly, Fed loss-making operations result from the large remunerated reserves regime put in place to respond to the North-Atlantic Financial Crisis of 2007-8, involving implicit coordination between the Fed and the US Treasury for fiscal and monetary policies joint implementation, while implying material transfers from the Treasury to financial institutions that add to incurred costs for unconventional monetary policies.
Systemically important banks play a key role in ensuring the stability of the country's financial system. Therefore, their identification and further regulation of their activities is an important objective facing the relevant authorities. Based on this, the research aims to evaluate Kazakhstan's criteria for determining systemic importance in banking, assess the rationale behind its specific approach, and compare it with international practices to ensure effective management of systemic risks. The study calculates a generalized indicator of systemic importance for Kazakhstani banks by applying a weighted methodology based on assets, liabilities, deposits, loan portfolios, and other financial indicators to categorize banks into systemically important, potentially systemically important, and non-systemically important categories. Systemically important banks play a crucial role in the stability of both national financial systems and economies at large. In Kazakhstan, the National Bank identifies and supervises these banks using a methodology that evaluates the size of assets and liabilities, significance to the financial infrastructure, business complexity, and economic interconnectedness. The criteria aim to quantify the systemic importance and ensure that regulations are tailored to the risk profile of each institution. As of early 2023, institutions like JSC "Halyk Savings Bank of Kazakhstan" and JSC "Kaspi Bank" are recognized as systemically important, with others deemed potentially significant. The regulation of these banks includes additional capital provisions to mitigate risks and promote financial stability. Proposed measures suggest varying regulatory intensity based on the calculated systemic importance, including enhanced credit risk management. This approach aims to diminish market concentration and encourage equity among financial entities. Despite advancements, the Kazakhstani banking sector's evolution faces challenges, such as the need for improved financial literacy and a more competitive environment. Continuous international cooperation is essential, as global practices provide valuable insights that can refine local regulations. This integration of local and international regulatory frameworks aims to foster a resilient financial system in Kazakhstan.
The present work investigates the previous research on cryptocurrency since its inception and provides an overview of its journey as a discipline. The study utilizes the Scopus database to collect the documents, resulting in 2,533 research papers published between 2008 and 2021. A bibliometric analysis is conducted, followed by the network analysis using VOSviewer. The study provides a more comprehensive overview of cryptocurrency research and its significant growth since its inception. It also gives us an understanding of how cryptocurrency research emerged as a domain across various dimensions. Further, it also provides an understanding of the possible future research areas for cryptocurrency research. It will provide a base for scholars and researchers to identify the current gaps in cryptocurrency research across various domains within business, management, and accounting and select the most appropriate field for their study.
The US Federal Reserve has been incurring income statement losses since September 2022 and now operates in a state of negative net equity. The Fed has taken the position that the losses do not matter to monetary policy making and normal functioning. This paper sets out the reasons for the mounting losses and the Fed positioning in response, covering fundamental issues at stake, including interest paid on reserves to financial institutions, remittances and deferred assets. The analysis demonstrates that the scale and duration of the losses and the creditor relation with Treasury that has resulted pose a major challenge to Fed credibility and independence and raise questions regarding the financial and political sustainability of the Fed stance. Further, the paper presents evidence that the Fed has not been transparent with Congress or the public about the risks and costs of the QE and IOR/ONRRP regime. It suggests this non-transparency might be explained by a fear of loss of credibility that has extended and exacerbated the loss making. Finally, the analysis reveals a fiscal and political cost of Quantitative Easing (QE) that questions its possible use as policy response in future crises.
The application of IAS/IFRS standards, implying the substantial downgrading of the realisation principle, makes financial reporting inconsistent with the determination of distributable profits. This article summarises the Italian approach to this problem. Generally speaking, the introduction of a harmonised European regulation on this matter seems desirable, since different rules in EU Member States are likely to create disparities regarding the level of creditor protection.
German GAAP can be categorized as typical Continental European (F & uuml;lbier, R. U., C. Pelger, E. M. Kuntner, and M. Bravidor. 2017. "The Role and Current Status of IFRS in the Completion of National Accounting Rules - Evidence from Austria and Germany." Accounting in Europe 14 (1-2): 13-28; Nair, R. D., and W. G. Frank. 1980. "The Impact of Disclosure and Measurement Practices on International Accounting Classifications." The Accounting Review 55 (3): 426-50) with a primary focus on creditor protection by means of a strong prudence (or conservatism) principle and the priority of the profit (dividend) determination function compared to the information function of financial statements. The increasing internationalization of German companies lead to a questioning of German GAAP and, ultimately, the introduction of IFRS. IFRS became not only mandatory for consolidated financial statements of listed companies but influenced German GAAP as such. Indeed, some elements in German GAAP were more aligned over time with some IFRS features to improve information quality of German GAAP financial statements. To adapt capital maintenance to these new elements and maintain a strong creditor protection, specific dividend distribution restrictions were introduced. The purpose of this paper is to provide a general presentation of the important features of capital maintenance in Germany with a particular focus on the accounting-induced specific dividend distribution restrictions.
This Report is an output of the European Law Institute - ELI Project on "ELI Guidance on company capital and financial accounting for corporate sustainability" (2019-2023). After brief introduction to the Project and research methodology, it provides a comprehensive review of legal-economic academic literature on corporate sustainability and capital maintenance. Following the literature review, the Report provides a legal analysis of EU primary and secondary sources of law tackling sustainability issues, including some sustainability standards, alongside relevant cases of the Court of Justice of the European Union (CJEU). This legal analysis does also include a comparative overview of national capital maintenance regimes in German, British and French company law and regulation. Although academic literature and evidence from corporate practice suggest that the stakeholder model of corporate governance has been challenged by and somewhat relegated in favour of the shareholder primacy orientation, findings presented herein show that the idea of sustainable company is deeply entrenched in EU primary and secondary legislation. The stakeholder model prevails in national company laws. The idea of corporate sustainability and longer-termism is underpinned by the mandatory rules on share capital maintenance, as stipulated in the Directive on certain aspects of company law. In fact, EU case law appears to adhere to the minimum capital maintenance regime adopted at the EU level, submitting stricter Member States regimes to the proportionality test. The concept and need of capital maintenance is further challenged by a fierce academic debate, where some scholars have suggested alternative or complementary forms of creditor protection within and outside the scope of company law. The EU fosters long-term corporate financial robustness through introducing and maintaining stakeholder model of EU company law, as explicitly provided under constitutional provisions of the TFEU; mandatory share capital rule, accompanied by remedial schemes and possibility of introducing alternative or complementary regimes (including civil law arrangements such as insurance schemes); non-financial disclosures of corporate social responsibility (CSR) and environmental, social and governance (ESG) matters, with reference to international standards (most notably UN and OECD), supported by pensalisation schemes; forward-looking remuneration policy, accompanied by the remuneration 'capping' scheme, deferral periods and shareholders' binding say on remuneration proposals; and prudential requirements such as special capital and solvency requirements for financial and insurance institutions. Concerning financial accounting and reporting, corporate sustainability is not covered in EU accounting law and regulation, where fair value accounting, including accounting for IFRS 9 on financial instruments in conjunction with IFRS 13 on fair value measurements, remains a significant problem for longer-term financial sustainability, requiring alternative or complementary solutions.
