Law and Economics

The recent financial crisis in Europe and the ensuing governmental measures have intensified debates in the financial and business sectors on regulation as well as on the enforcement of legal, ethical and behavioral norms. The German National Academy of Sciences Leopoldina and the Israel Academy of Sciences and Humanities have organised the symposium “Law and Economics” to discuss these issues from a scientific perspective and in a bilateral approach. The meeting consists of three sessions, dedicated to “Banks and Banking”, “Enforcement of Norms”, and “Behavioural Law and Economics”, as well as a panel discussion.

Financial institutions have been subject to serious new legal and supervisory requirements, but some economists claim that these are still too lenient. On the other hand, the new US government is about to deregulate the banking sector again. Traditionally, legislators were concerned primarily with the establishment of new rules and regulations, but recently there has been more of an emphasis on the enforcement of these rules. As a consequence, the competences of regulatory agencies have been widened and the penalties for breaking the rules have been increased significantly. More generally, there must be more attention to regulating not only by sanctions, but by incentives. This is one of many fields in which the interplay between behavioural law and economics makes a considerable contribution.

In addition to the three symposium sessions, there will be a panel discussion on “Corporate Regulation and Corporate Ethics” focusing on the effects of corporate
(over-)regulation and on potential alternatives, such as self-regulation and business ethics. Corporate boards are at the center of this discussion.

The symposium is organised under the joint leadership of Leopoldina member Professor Klaus J. Hopt and the former President of the Israel Academy of Sciences and Humanities Professor Menahem Yaari. The Leopoldina and the Israel Academy of Sciences and Humanities regularly organise joint symposia in various science fields. The present symposium is the first bilateral activity in the area of law and economics.