Research

Kern Alexander has a long publication record at the intersection of international economic law, banking and financial market law and regulation, and corporate law with special emphasis on the formation of international regulatory norms and corporate governance standards [Kern Alexander's ORCID].

His research interests have focused on the governance and regulation of financial institutions and markets through the lens of legal, regulatory and economic theory. His book, Principles of Banking Regulation, (Cambridge University Press, 2019) is one of the leading books to address these issues [link]. Recently, his research has addressed the role of corporate governance of financial institutions and markets in supporting environmental and social sustainability.

His research approach involves international, comparative, empirical and interdisciplinary methods, focusing on the implementation of general principles of international banking regulation into national legal systems. It also analyses the corporate law of shareholder rights and fiduciary board duties for banks and financial institutions in the context of climate change and broader sustainability objectives. This research includes examining the effect of corporate law and governance on ethical behaviour and organisational culture of financial institutions and the shift in recent years to more sustainable business practices.

During his career, he has had an abiding interest in the study of financial crises and the role of law and regulation in mitigating their occurrence. His early research focused on how inadequate legal and regulatory frameworks contributed to the Asian Financial Crisis of 1997-98, the Global Financial Crisis of 2008 and the Eurozone Sovereign Debt Crisis of 2010-12. While crises are a clear feature of market-based financial systems, his recent research interests have extended to how banking and capital market regulation can address the financial risks of environmentally unsustainable economic activity.

In parallel with the study of crises has been his research into international financial regulatory standards and their implementation into national and domestic legal systems. This has proceeded in tandem with continuing efforts to understand the complexities of the global financial system, including complex financial institutions, market evolution and product and technological innovations, and the relevance of these developments to environmental and social sustainability.

His early work on global financial governance, international regulatory soft law and financial crises resulted in important publications, such as Global Governance of Financial Systems: the International Regulation of Systemic Risk (Oxford University Press, 2006) [link]. This book was the first published work that foretold how risk management failings in large financial institutions and related regulatory gaps contributed to excessive risk-taking by banks and other financial actors in the securitization and credit derivatives markets that resulted in the global financial crises in 2008. The book has been cited over 400 times in academic publications and attracted much positive commentary [see Le Monde diplomatique (1 Oct. 1006); see also B. Banaei, Global Governance of Financial Systems: The International Regulation of Systematic Risk, 35, Denv. J. Int'l L. & Pol'y 547 (2007)]. The book has been translated into French, Japanese and Chinese (Mandarin). The book provided the first legal analysis of the regulatory failure of the Basel II agreement (Basel Capital Accord) by specifying weaknesses in Basel II's internal risk-based approach for calculating regulatory capital and the absence of regulatory controls over bank corporate governance. It was published nearly two years before the onset of the Global Financial Crisis of 2007-08 [the second legal work to address these regulatory failings was published in 2008, see Daniel Tarullo, Banking on Basel: The Future of International Financial Regulation (2008, Washington DC: Brookings Institution Press].

Harvard's Professor Richard Cooper reviewed the book and commented that: "This book finds serious deficiencies with the by now extensive system of committees, organizations, rules, and guidelines that have emerged to govern and manage the international financial system. Concretely, it suggests that the existing framework, based on the supervision of individual financial institutions (especially banks), fails to take adequate account of the negative macroeconomic consequences that may flow from the financial failures of particular institutions... In making its central argument, the book offers informative coverage of the International Monetary Fund, the Basel committees on banking, the Asian financial crisis, bankruptcy, the legal aspects of the system for settlement of payments, and many other relevant topics." [link].

The book provided the first detailed critique of interntional financial regulatory standards, including the Basel Capital Accord and its reliance on flawed internal risk weightings for calculating regulatory capital, which they argued would weaken financial institutions and lead to a global financial crisis. Their clarion call for global regulatory reform was ignored by many until the global credit crisis erupted in August 2007, and the European Parliament asked them to write the first report analysing how the global crisis occurred and how weak regulation contributed to it [see K. Alexander, J. Eatwell, A. Persaud and R. Reoch (7 Dec. 2007), 'Financial Supervision and Crisis Management in the EU', link]. Their European Parliament Report was cited by many academics and regulatory reform panels and its proposals formed the basis for later EU institutional reforms and stricter bank capital and liquidity rules along with mandatory central clearing of derivatives [see Financial News, 'European regulators discuss credit crunch report', (8 Aug. 2008), link]. The European Parliament Committee on the Financial Crisis invited them to write a follow-up report in 2010 entitled 'Crisis Management, Burden-sharing and Solidarity' discussing how governments can coordinate macroprudential policies to avoid another systemic crisis.

Global Governance of Financial Systems and related articles originated a large literature aimed at studying the international regulatory causes and consequences of banking and financial crises and the importance of international soft law in developing international financial regulatory standards. Subsequent international legal analysis [Brummer, 2010] cites Global Governance of Financial System as an important work in this area. Besides its influence in academic research, this work and related literature also led to important policy initiatives at the national, European and international levels.

Another strand of his early research addressed the legal and regulatory framework of US economic sanctions and their extraterritorial application to third country business entities. Specifically, this research provided a doctrinal analysis of corporate control liability and third party liability for violating economic sanctions regulations and was published in several top academic law journals, including the Georgetown International Law Journal [see Kern Alexander and Jon L Mills, Resolving Property Claims in a Post-Socialist Cuba, 27 Law &Pol'y Int'l Bus. (1995-1996)], the Pennsylvania State University International Law Review [K. Alexander, Trafficking in Confiscated Cuban Property: Lender Liability Under the Helms-Burton Act and Customary International Law, 16 Penn St. Int'l Rev. 523 (1998), link], and the European Business Law Review [Kern Alexander, Civil Liability on the Periphery: Third Country Transactions in Violation of United States Economic Sanctions, European Business Law Review (July/August, 1999) 314-332, link]. Later, his book Economic Sanctions: Law and Public Policy (Macmillan, 2009) was the first work to provide a comprehensive legal regulatory analysis of economic sanctions in several major jurisdictions, including the United States and European Union. His work on extraterritorial economic and financial sanctions anticipated the application of EU and US economic sanctions against Russia in 2014 and 2022 for its military conflict with Ukraine.

His research has evolved to address the inter-relationship between banking regulation and environmental sustainability. He was commissioned by the United Nations Environment Office to conduct research and write a report comparing how countries regulate the financial risks associated with environmental sustainability, particularly climate finance risks. This research led to his path breaking report 'Stability and Sustainability in Banking Reform: Are Environmental Risks Missing in Basel III' (Cambridge, 2017) [link]. This report was based on over one hundred interviews of regulators and bank officers from around the world and was the first study of the interrelationship between banking regulation, environmental sustainability, and climate change. His report has been widely cited and has spawned a growing area of research that analyses the relationship between law and regulation, finance, and environmental sustainability.

His research on banking regulation and environmental sustainability was elaborated further in his monograph Principles of Banking Regulation (2019, Cambridge University Press) [link]. The book attracted positive reviews and commentaries [see Dr Michael H. Meissner's book review published in the Journal of International Banking and Financial Law (Lexis: Butterworths, 2020) 387-390], with its analysis of post-crisis regulatory developments concerning bank governance, macro and micro prudential regulation, shadow banking, financial technology, central bank digital currencies and mis-selling of financial products.

Related to his research on sustainable finance and regulation, he is the co-editor of the Cambridge Handbook on Sustainable Finance: Governance, Regulation and Supervision (Cambridge University Press, 2025) [link]. There should also be added that the International Monetary Fund Legal Department invited him to attend a high-level workshop on 29-30 June 2022 at which he was invited to present his most recent work: a paper on the international banking regulation, the Paris Climate Change Accord and Climate Finance Risk. At this high-level meeting with IMF officials and research staff, not only did he receive helpful comments on his paper, he learned that his previous work (particularly the UN report) had influenced the work of IMF research staff and regulatory experts and had contributed to the development of the IMF's new regulatory and central bank policy framework adopted in 2022 that addresses how climate change risks affect central banks policies and banking regulation practices.

Most recently, his research has focused on the legal aspects of central bank operations and how their policy tools affect environmental and social risks. This research resulted in a research paper entitled 'Central Banking and Inequality' (2022) [this paper was commissioned by the European Central Bank Legal Research Programme and was presented by him and his co-author at the ECB's annual legal research seminar on 8 June 2022] (co-author) and a co-edited book Central Bank and Sustainability (Cambridge University Press, forthcoming 2025). His research on central banks involves comparative analysis of central bank legal mandates and their effect on monetary policy and economic stability with particular focus on climate finance risks.

He has led research projects founded by the United Nations Environment Office, the UK Economic and Social Research Council (ESRC), the Ford Foundation and Swiss National Science Foundation on projects ranging from the legal design of sovereign bond contracts, international financial regulation and banking regulation and environmental sustainability.

His academic articles have been published in top tier journals, including, the International Corporate and Commercial Law Review (ICCLR), Georgetown International Law Journal, European Business Law Review, European Business Organisation Review, Journal of International Economic Law, Journal of Corporate Law Studies, and Journal of Law and Contemporary Problems (Duke Law School). He is the author or lead author of several other books that are widely cited in the academic and practitioner literature including: Market Abuse and Insider Dealing (2022, 4th ed. Bloomsbury) and Brexit and Financial Services (Hart, 2018).

In 2024, his leadership in inter-disciplinary research was recognized by the University of Zurich with his election as Director of the University of Zurich Competence Center of Sustainability: Finance, Law, Science and Humanities (CCF). The CCF is one of a few high-level research centers at the University of Zurich. The CCF conducts inter-disciplinary research on climate finance regulation and other areas of environmental and social sustainability [link].

His research has also been accessible to the general public through a number journalistic reports in influential news outlets, such as the BBC, Al-Jazerra, The Financial Times, Bloomberg, Le Monde diplomatique, the Financial News, the Milken Review and Nikkei (the main newspaper in Japan).

Looking forward, the focus of his work over the next five to ten years will be on the interaction between the governance of financial institutions and markets in addressing the challenges of technology and sustainability. This includes both the analysis of corporate law and the public administrative law of financial regulation. A related and important area of his recent and future research is on the legal framework governing the operation of central banks and the interpretation of their legal mandates in the context of environmental and social sustainability. Thus far, his research into banking and financial market regulation has attracted substantial research funding from, among others, the Ford Foundation and the UK Economic and Social Research Council. He plans to continue submitting research grant applications to other funding bodies as well.

In the future, his focus would be on building inter-disciplinary relationships with political economists, historians, public policy specialists, and natural scientists working in related areas to banking and financial market regulation and corporate governance in the context of environmental and social sustainability.