CALL FOR PAPERS Nº 36 - IURIS DICTIO JOURNAL

The Challenges of Financial Regulation and Supervision in the Face of Polycrisis

The Iuris Dictio journal invites researchers and specialists in Banking Law, Financial Regulation, Economic Law, and related fields to submit their articles to be considered as part of Dossier No. 36, which will be published in December 2025. This issue will focus on regulatory responses, both prudential and non-prudential, and the various strategies and supervisory mechanisms in the face of the multiple challenges, risks, and vulnerabilities that the financial system is facing in a new era of economic, political, social, and environmental crises. This situation is compounded by the emergence of new technologies and actors that are shifting the paradigm in understanding the risks associated with financial products and services. Specifically, it aims to address regulatory responses and supervisory strategies regarding certain factors that could lead to the next financial crisis and structural changes in the system, such as contagion risks between financial system actors due to the emergence of Non-Banking Financial Institutions (NBFIs), digitalization of finance, and climate change.

The financial reforms after the 2008 crisis, primarily encapsulated in the Basel III Accords, focused on improving bank solvency, reducing systemic risk, and promoting financial stability. To achieve this, stricter capital requirements were set, limits on the levels of debt that financial institutions could assume, adequate levels of liquid assets and long-term financing, as well as conservation buffers and countercyclical capital buffers to absorb losses during periods of financial stress. However, economic, social, and political conditions have changed significantly since then, and the global financial system faces new challenges that require adaptive and distinct responses.

In several forums and conferences, the following factors have been identified, at least in general terms (specifics depend on each jurisdiction), as potential causes of a financial crisis:

• Changes in macroeconomic factors, such as rising interest rates in monetary policies, inflation, among others.
• The use of cryptocurrencies and other virtual assets.
• Cybersecurity incidents and information protection.
• The financial and prudential management of Non-Banking Financial Institutions (NBFIs), such as Investment Funds, Asset Managers, and Trading Firms.
• Risks generated in providers of technological and critical services, including Fintech, Banking-as-a-Service (BaaS) providers, Open Banking, and others, even those linked to payment systems.
• Climate change.

These factors are interconnected, making it crucial to identify the communication and contagion channels between them in order to apply appropriate supervision and regulation practices. One of these factors played a fundamental role in the 2023 banking crisis, particularly the Silicon Valley Bank failure. One of the triggers of this crisis was that, due to the increase in interest rates in monetary policies, a significant loss in the value of one of its assets (US Treasury bonds) was recorded, which triggered a liquidity crisis due to massive deposit withdrawals, eventually leading to the bank's collapse. On the other hand, in the Synapse crisis (2024), operational and settlement failures in the entity's systems caused the loss of financial users' resources, even questioning the application of deposit insurance. This case has sparked debates on the need to regulate the contracting of financial entities with technological providers and the applicable security standards.

To emphasize the importance of the factors mentioned above, it is highlighted that among the supervisory priorities set by the European Central Bank for 2023 were liquidity risk in NBFIs, the digitalization of finance, and climate change. Also, within the Financial Stability Surveillance Framework of the Financial Stability Board (FSB), several of its principles apply to this context, such as: identifying system vulnerabilities (distinct from shocks or risks), monitoring these vulnerabilities, and differentiating them across jurisdictions. One example is cryptocurrencies: while some jurisdictions consider them a threat to monetary sovereignty, others focus on risks related to money laundering and fraud. Therefore, it is essential to identify system vulnerabilities as a whole.

Considering the factors that could generate the next financial crisis and the need to analyze vulnerabilities and risks, three key structural changes are identified for the analysis of this Call for Papers:

1. The structural change in the provision of financing, originally provided by banks, now involving Non-Banking Financial Institutions. According to the FSB’s Global Report on Non-Banking Financial Intermediaries (2022), it was estimated that around half of the world's financial assets are intermediated by non-bank entities. While diversification of credit sources is beneficial for the economy and its resilience, the growth of these entities has generated several crises, such as the Archegos crisis (2021), the "Dash for Cash" crisis (2020), and the UK Gilt crisis (2022), also known as the "UK’s Liability-Driven Investment (LDI) Crisis." These actors can transmit their risks to other financial entities and the system at large through two channels: the market (when assets are in the same market) and counterparty or credit risk.

2. The digitalization of finance, which has occurred in various forms. The world of crypto assets and related activities involves a multiplicity of risks and vulnerabilities for the system. While its technology is marketed as innovative, the vulnerabilities associated with these activities are very similar to those in traditional finance: liquidity risk (mismatch in the maturity processes of assets and liabilities) and counterparty risk. Digitalization and the online provision of financial services have also increased incidents of cybersecurity and fraud, generating discussions on the standards and security mechanisms that should be applied, as well as the responsibility of both providers and users, as the adoption of technologies is not the same for financial entities as it is for users.

3. Climate change, which represents a fundamental risk for the financial sector. Factors such as volatility in energy markets and exposure to physical and transition risks could expose vulnerabilities in the financial sector. Globally, efforts are focused on aspects such as data disclosure, vulnerability analysis, and the supervision and regulation tools to identify, assess, and mitigate these risks. Unlike risks with cyclical effects, climate change is a risk with permanent effects, so it is necessary to evaluate regulatory responses and, most importantly, supervisory measures to ensure an orderly transition.

In this context, it is evident that the challenges and vulnerabilities faced by the financial sector are varied, some cyclical (such as changes in monetary policies and certain macroeconomic factors) and others structural (such as climate change and digitalization). Therefore, it is crucial to address the regulatory and supervisory responses to these challenges.

The focus of this Dossier is to identify international best practices and regulatory standards, both prudential and non-prudential, that can address the mentioned challenges, considering not only regulation but also the supervisory approach that should be applied. Additionally, it aims to determine the public policies, or even internal policies, that each financial entity should adopt to address these vulnerabilities.

With this background, Dossier No. 36 of the Iuris Dictio journal, coordinated by Sebastián Correa and María Cristina Castellanos, seeks to contribute to reflections on the role of financial regulation and supervision in the face of new challenges facing the financial system and its structural changes.

In this regard, some of the suggested topics for the composition of the Dossier are as follows:

• Management of liquidity risk and adoption of international supervision standards in Non-Banking Financial Institutions.
• Mitigation of contagion risk among different financial system actors.
• Adoption of international standards for managing liquidity risk: costs and benefits of various tools.
• Regulation of technological and critical services provided by third parties (BaaS, Open Banking, etc.).
• The use of Artificial Intelligence in risk management models (liquidity, market, credit, reputational, money laundering, etc.).
• Structural regulation between financial entities and their division.
• Digitalization of financial services and products and consumer protection.
• Responsibility (contractual and non-contractual) for cybersecurity incidents and fraud.
• Mitigation and management of climate change risk: designing transition plans.
• Tools for identifying vulnerabilities, risks, and system shocks.
• The challenge of monetary policy: financial stability vs. inflation.

Furthermore, the call for papers is open to receiving articles on various topics of law for the Miscellaneous section, summarized book reviews for the Reviews section, and interviews for the Interviews section. All articles must be original and not under consideration for any other publication.

Articles may be submitted in Spanish or English and must follow the publication guidelines, which can be consulted at the following link:

https://revistas.usfq.edu.ec/index.php/iurisdictio/about/submissions

The deadline for article submission is June 15, 2025. Articles must be uploaded to the journal’s OJS platform after registering as a user at the following link:

http://revistas.usfq.edu.ec/index.php/iurisdictio/user/register

For any further inquiries, please contact:

correasebasj@gmail.com
revistaiurisdictio@usfq.edu.ec

We appreciate your help in disseminating this call for papers.