S&C Financial Services Lawyer Thomas Baxter Explains the Danger of the Diminishing Legal Function at Financial Institutions in Business Law TodayApril 2, 2019
In a recent edition of the American Bar Association’s Business Law Today, Tom Baxter, a member of S&C’s Financial Services group, offered an analysis of the declining role of the legal function in financial institutions following the global financial crisis. Tom illustrates how the rise of risk management has impacted the legal function: “Legal judgments should be made by those who are qualified, namely the lawyers in the legal function.”
Tom explains that the reduced role of the legal function has arisen, in part, from the definitions of different types of risk that have been promulgated by regulators. This has resulted in compliance professionals being called upon, in many cases, to make decisions that should be made by lawyers. “This unintended consequence is dangerous, particularly if the diminution becomes material,” he notes.
The article, titled “The Rise of Risk Management in Financial Institutions and a Potential Unintended Consequence – The Diminution of the Legal Function,” was published on April 2.
Tom’s insights draw upon his deep experience, including more than 35 years at the Federal Reserve Bank of New York, most of which was spent in senior leadership roles. S&C’s financial services practice is recognized as the gold standard in the industry – our lawyers have advised on 11 of the 12 largest bank M&A deals since 2010, including ING Bank’s merger with Capital One Financial Corp., Royal Bank of Canada’s acquisition of City National Corp., and First Niagara Financial Group’s merger with KeyCorp.