The privatization of the rail network, which started in 1996, is the main motivation for this analysis of the recent performance of and prospects for the sector. The paper starts with a brief description of the evolution of the Brazilian transport sector and its relationship with the country's economic development. The second section presents an overview of the size and relative importance of the transport sector by mode, and the characteristics of intermodal competition. The operational and cost structure of the rail sector is then analyzed in detail and compared to its tariffs. The limited cash flow generation of the rail concessionaires is set against the investment needs of the sector for service expansion. The conclusions drawn from the financial performance analysis prompt a discussion of the prospects for the Brazilian rail sector.

Recent decisions by the Spanish national competition authority (TDC) mandate payment systems to include only two costs when setting their domestic multilateral interchange fees (MIFs): a fixed processing cost and a variable cost for the risk of fraud. This artificial lowering of MIFs will not lower consumer prices, because of uncompetitive retailing, but it will however lead to higher cardholders’ fees and, most likely, new prices for point of sale terminals, delaying the development of the immature Spanish card market. Also, to the extent that increased cardholders’ fees do not offset the fall in MIFs revenue, the task of issuing new cards will be underpaid relatively to the task of acquiring new merchants, causing an imbalance between the two sides of the payment networks. Moreover, the pricing scheme arising from the decisions will lead to the unbundling and underprovision of those services whose costs are excluded. Indeed, the payment guarantee and the free funding period will tend to be removed from the package of services currently provided, to be provided either by third parties, by issuers for a separate fee, or not at all, especially to smaller and medium-sized merchants. Transaction services will also suffer the consequences of the fact that the TDC precludes pricing them in variable terms.

The position of non-State actors – including individuals and non-governmental organisations, as well as private corporations and their respective business associations – in WTO law is one of the most contentious topics currently discussed in the field of international economic law. The purpose of this article is not only to show that this discussion raises fundamental questions as to the aims pursued by the WTO, but also to explore the possible consequences of the changing character of international economic law itself, which have so far been little noted in the legal literature. The article starts with an evaluation of the possibilities for individual rights granted to private actors by WTO law. In this connection, the authors come to the conclusion that, judged by its goals and its normative construction, the WTO legal order is not only suitable for according rights directly to individuals, but is actually designed precisely for this purpose. The authors continue with an analysis of the current legal and factual opportunities for non-State actors to participate in the decision-making processes and dispute settlement system of the WTO. In this regard, it is submitted that a number of non-State entities already play an important, albeit mostly informal role in the WTO at present. Furthermore, this participation is likely to increase in the future, due to the currently visible changes in the normative structure of the international economic system, which are leading to the evolution of what can most accurately be characterised as the development of a ‘transnational economic law’. Following an evaluation of these structural changes and their possible impact on the future role played by non-State actors in the international economic system, the article concludes that the WTO and other relevant international organisations obviously need to adapt to the changing normative structure of international economic law, in order to be able to continue performing the regulatory tasks assigned to them.

This article analyses the Council Regulation on the Statute for a European Company, and its impact on board structures and corporate governance within the European Union. It describes the Statute's structure, and highlights the Statute's many unanswered questions regarding corporate structure and governance. The article argues that the Statute will have its greatest positive effect on cross-border combinations, and will have little or no effect on normal takeovers, joint ventures, and subsidiaries. It advocates the immediate need for Member States with a two-tier structure to allow for a one-tier structure, and vice versa. Finally, the article asserts that the Statute will become an engine for regulatory competition among the Member States as they model their respective corporate forms to attract firms.

This article examines the regulation of directors' remuneration in EU, UK and Belgian law. The author argues that there are two categorises of norms for the regulatory framework of directors' remuneration: one is market-based, market efficiency norms of agency costs; the other is socio-legal norms. The paper argues that agency costs – a responsive mode of governance – alone cannot adequately address the problems of directors' remuneration. On the other hand, socio-legal norms – which are value and ethics-focused – can better construct a paradigm capable of addressing a broader issue of directors' remuneration in the EU context. Agency costs-based regulation has been used by the EU whereas socio-legal matters have been left to Member States. The article shows how socio-legal norms could form the underlying basis of the regulatory regime by examining the laws in the UK and Belgium. It is concluded that the European Court of Justice will need to carry out the role of negative integration by harmonising these social values in developing EU company law.

Private enforcement of EC competition law has reached a new stage with the publication of the European Commission's Green Paper entitled ‘Damages actions for breach of the EC antitrust rules’. Even though it is unclear whether any legislative action at the Community level will follow, the Green Paper has triggered a lively debate. Private enforcement faces a number of external challenges, such as the possibility of introducing a ‘plea bargaining system’ into EC competition law, the ‘more economic approach’ and coordination with public enforcement. Private enforcement is furthermore beset with a number of intrinsic difficulties, the passing-on problem arguably being the central one. This article attempts to find a solution to that problem, i.e., to the difficulties raised by the passing-on of damages through the various levels of the distribution chain. After evaluating the various options proposed by the European Commission in its Green Paper, it comes to the conclusion that a ‘factor approach’ is the most appropriate. A draft provision for potential secondary EC legislation addressing the passing-on problem is offered, attempting to reconcile the insights of economic theory with the exigencies of civil litigation in the courthouse. This provision stipulates the unavailability of the passing-on defence against direct purchasers unless the direct purchaser has entered into a fixed-quantity, cost-plus contract with his purchaser. Indirect purchasers are entitled to damages provided there is no break in the chain of causation. Their damages should be quantified on the basis of the price difference at the direct purchaser level, i.e., the difference between the price actually paid by the direct purchaser and the hypothetical price the direct purchaser would have paid but for the cartel. This amount is multiplied by a certain factor (fraction) taking into account the likely pass-on rate.

I would like to use (or abuse) my comment on John Armour's thoughtful paper to sketch out a conceptual approach towards legal capital with an emphasis on structure rather than on substantive regulation.

Risk capital plays a vital role for growth and jobs in Europe. It is against this background that the European Commission launched its 1998 Risk Capital Action Plan in order to eliminate persistent regulatory barriers that may impede the creation of a truly single market. In the framework of the Action Plan's implementation, a strong need was felt for research advice. Thus a Risk Capital and the Financing of the European Innovative Firms (RICAFE) research network was formed by members of the London School of Economics and Political Science (Financial Markets Group), the Centre for Financial Studies in Frankfurt, HEC School of Management Paris and Turin University. The project co-leaders of RICAFE are Professor D.C. Webb and Dr Marco Da Rin. RICAFE aims to achieve research breakthroughs in the economics of risk capital financing of innovative companies and to offer informed, insightful research advice to the commission, forming the basis of a blueprint for the implementation of the Risk Capital Action Plan. In the intellectually stimulating atmosphere of the financial Markets Group at the London School of Economics, the First RICAFE Conference was held on 24-25 October 2003.

As most states, France has been affected by the global financial crisis and has quickly taken appropriate steps to tackle its worst effects. Thus, France immediately took measures to respond to the liquidity crisis and recapitalised the most important banks in order for them to continue to finance the ‘real economy’. Some measures have been aimed directly at the ‘real economy’, such as the creation of a mediator for the distribution of credit and the establishment of a French sovereign wealth fund aimed at investing in strategic companies facing difficulties and in medium-sized companies. After the first wave of the crisis, France took a preventive measure concerning the remuneration of traders and a punitive measure by creating an exceptional taxation of traders' remuneration. But the crisis has also provoked a long-term reform of the French supervisory landscape, merging the supervisory authorities of the banking and the insurance landscape into a single body, the Authority for Prudential Control (Autorité de Contrôle Prudentiel).

This article proposes a model of the transformation process of statutory monopolies in European Community (EC) Law, on the basis of the liberalisation of the markets which has taken place in the past ten years. Despite discrepancies between the paths chosen for the various public utilities' sectors, EC institutions, including the Court of Justice of the European Communities, have pursued a policy, which they have constantly refined, regarding the transformation of statutory monopolies, regardless of its legal basis in the EC Treaty. After first defending a very far-reaching approach in favour of total liberalisation, EC institutions have adopted a more balanced attitude towards statutory monopolies. This is reflected in a four-tier transformation programme, which comprises both a functional and a structural transformation.

In its Action Plan ‘Modernising Company Law and Enhancing Corporate Governance in the European Union – A Plan to Move Forward’ of 2003, the European Commission proposed a mandatory disclosure of institutional investors' voting behaviour with regard to their portfolio companies as a medium-term measure. This proposal was evidently inspired by SEC rules mandating voting disclosure of investment companies and investment advisers adopted in the same year.

However, the realisation of the Commission's proposal is far from certain. It has not only met with strong opposition from commentators when it was presented to the public in 2003, but the Commission itself recently launched a consultation process to reassess the necessity and desirability of the medium and long-term proposals of its Action Plan, thereby indicating that it will take the principle of subsidiarity of EC law much more seriously than it has done in the past. At the same time, the UK Government is getting ready to adopt a disclosure rule at national level.

This paper examines the US debate on and experience with institutional investors' mandatory voting disclosure. With the aid of the insights and arguments thereby gathered, it argues that there continues to be a case for a mandatory voting disclosure rule at EC level.

Before joining the European Union on 1 May 2004, Hungary entered into an Association Agreement with the European Community and its Member States on 16 December 1991. One of the most important aims of this Agreement (also known as the Europe Agreement) was to establish a free trade area between the parties to the Agreement, covering all trade between them, and to make progress towards realising the other economic freedoms on which the Community is based. As a tool for achieving these aims, Chapter III of the Europe Agreement prescribed the approximation of legal regulations. Of course, this approximation did not imply a two-way movement, but the one-sided approach of Hungarian law to the legal rules of the Community. The parties to the Agreement held that one of the basic conditions of Hungary's economic integration was to approximate the country's present and future laws to the laws of the Community. Hungary therefore undertook that as far as possible Hungarian legislation would be brought into accordance with the laws of the Community. The Europe Agreement indicated the main areas for the approximation of laws. Under Article 68 of the Agreement, approximation was also meant to take place in the area of company law.

The European Business Organization Law Review presents three articles, by Schwarcz, Kane and Mayes, analysing some of the main issues regarding principles versus rules in financial regulation. These articles result from papers presented at a symposium in April 2008 entitled ‘Principles v. Rules in Financial Regulation’ organised by the Centre for Financial Analysis and Policy and the Centre for Corporate and Commercial Law Studies at the University of Cambridge. The symposium attracted academics, policy-makers, regulators and practitioners from several leading jurisdictions representing a range of disciplines including accounting, economics, finance and law, who were invited to present papers on specific areas of the principles-versus-rules debate in financial regulation and to discuss the impact of the global credit and financial crisis on principles-based regulation.

The Centros decision ranks as one of the most controversial decisions of the ECJ to date. The decision has raised a number of important issues, which have been vigorously debated in several countries of the EU. The most controversial question raised by the Centros judgement is whether the so-called siége réel Theory, or Sitztheorie, which until now has been applied by the majority of the EU Member States for determining the nationality of companies, can still be applied to companies which originate from other Member States. If the siège réel theory can no longer be applied by a Member State to deny the recognition of certain foreign companies as separate legal entities, this fact would mean an important change of perspective for the European Company Law.

The idea of the European Company (Societas Europaea, SE) is almost as old as the European Community. In 1959 the idea was initially formulated by Pieter Sanders and by Thibièrge. In fact, however, the idea is much older. As early as 1926 this notion was discussed during the 34th German Conference of Lawyers (Deutscher Juristentag) in Cologne. Altogether there were four drafts of regulations for a European Company in the years 1966, 1972/1974, and 1988/1991. In December 2000, after lengthy negotiations, the European Council approved the European Company, and the draft legislation passed the European Parliament in October 2001. While the first draft contained more than 400 paragraphs, the last one regulates the SE by a Regulation, consisting of only 70 articles and a supplementing directive. By 2004, the national legislators have to implement the Directive, which concerns the employees' co-determination, and, in addition, have to enact complementary and amplifying acts.

In the field of product and environmental liability, the justification for limited shareholders' liability has been discussed with renewed fervor in the U.S. In 1995 the lower instance courts allowed product liability claims from silicone breast implant patients against Dow Chemical, a company holding 50% of the shares of the defendant. In June 1998 the United States v. Bestfoods Supreme Court decision defined and clarified the conditions for the liability of controlling shareholders for environmental damage caused by their subsidiaries in accordance with § 107 (a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

Regulators around the world, including the European Commission, are becoming increasingly interested in behavioural finance as a toolbox for better securities regulation. When securities laws are designed to prevent or minimise the effect of systematic investor bias, they may violate one of the most fundamental principles of traditional securities regulation, the ‘inalienable right of everyone to make a fool of him (and her)self’ (Louis Loss). The paper discusses the potential and boundaries of an alternative concept of investor protection, based on the assumption that investors systematically fall prey to certain fallacies. Unlike the philosophy underlying traditional securities regulation, this concept's impetus is not the danger of market failure caused by asymmetric information but by bounded rationality. Its objective is not the informed but the prudent investment decision. Its measures are rules of an ‘asymmetric’ or ‘libertarian’ paternalism which lead those who need help to better investment decisions without limiting the freedom of those who do not need or want any assistance. The paper exemplifies this concept by analysing how the Market in Financial Instruments Directive's conduct-of-business regulation could be re-shaped to protect overconfident investors who suffer from biased self-attribution and confirmation bias from the dangers of excessive trading.