Banks, Bits and Bailouts – Investment Treaty Protection in the Financial Services Sector (January 2022)
In times of financial and economic crisis, Governments and monetary authorities may take a range of measures which could have adverse impacts on investors in the banking and finance sector, including bailouts, restructuring of sovereign debt and implementation of restrictive financial regulations. The response to COVID-19 has seen unprecedented regulatory measures such as these being taken around the globe to ease the economic impacts of the pandemic. Banks, financial institutions and investors may suffer adverse impacts as a result of these measures, therefore it is important to be aware of the protections offered by international investment treaties, such as bilateral investment treaties (BITs) and Free Trade Agreements (FTAs). However, advance planning is essential to ensure the protections offered by BITs and FTAs are available to banking and finance investors if a dispute emerges.