Financial Markets and Societal Constitutionalism

The global financial crisis of 2008 proved that a sovereign of last resort would always rescue the financial system from self-destruction. In constitutional democracies, stability and change are balanced through constitutional devices and procedures. In global finance's realm, on the contrary, no room is left for a dialectic between stability and change. The question of how power is distributed within the financial system is not only intrinsically connected with the analysis of its legal functioning but is also a necessary premise for addressing the issue of reform before the next, and perhaps fatal, `catastrophe moment'. States might thus recognize that to be treated as sovereigns only when it fits with the immediate needs of the global finance is not a good deal. Nor is it to renounce ex ante whichever reform that could avert a global crisis without threatening the elasticity of the law that governs the financial system.