FINANCIAL CIRSIS – PAST MISTAKES REPEATED OR NEW MADE?

Market in financial instruments directive tried to suppress the rigidity of EU legislative procedure with introduction of principle based legislation. At that time this approach was seen as something new and fresh. Big financial crisis in 2008 showed that adopted solution didn’t fulfil the expectations. Submission is divided in three parts. First part deals with background and logic of self-regulation. Self-regulation is placed in the system of regulation, deregulation and reregulation. It analyses why self-regulation becomes so popular. This part presents different types of self-regulation with their typical features. Second part deals with the problems and weaknesses. Self-regulation posts numerous questions. Fundamental question is whether self-regulation could be the effective change for state legislation. Second problem of self-regulation is the jurisdiction in re. Third problem is the openness of self-regulatory rules – they could be interpreted in different ways in similar situations. The end result is unequal legal treatment. Other end result is even scarier – interpretation is used to protect certain parties and so provoking the harm to society (like in case of Enron or latest financial crisis). And least but not last, self-regulation could end in overregulation, which side effect is that no one knows the law. We could speak about legal jungle. Third part of submission deal with prepositions, which should be fulfilled for working self-regulation. Basic question is, if self-regulation is appropriate for all the societies and all fields of economic activity. To answer that question, we must look at different points. So there is a question which harm could be done, if something goes wrong. Then there is a question if providers and consumers are developed enough not to abuse their rights and obligations. This part tries to establish certain mechanisms to make self-regulation workable and to avoid negative side-effects of self-regulation.