REGULATION, COMPLIANCE AND GOVERNANCE Essay Example | Topics and Well Written Essays - 2000 words

REGULATION, COMPLIANCE AND GOVERNANCE - Essay Example When the derivatives were distributed, it created an opportunity of basic training and helped in exploiting the difference in prices in future and spot markets. The gas trading of Enron had allowed it to be a market maker and acted as counterparty by trading on both sides and made profits as spreads between the offer and the bid price. Enron was under residual risk after it accessed both the markets and was able to overcome the same by entering into swaps and other such arrangements with dealers. As Enron owned physical plants and took charge of operating those, it had a comparative advantage over the competitors. The company was also able to protect itself from the market price movements for the same reason. Being an industry insider, it also had advantages of acquiring information needed for forecasting shocks related to particular region or sector. Therefore, besides being a market maker, Enron was also a creator of new products. The business strategy used by Enron, in 1990s, was asset light and vertical integration, after it became too leveraged due to the merger. The asset light approach indicates combination of the development of sophisticated risk management techniques with the least amount of ownership and operation of plants. Virtual integration system helps to maintain the reliability of a product with less capital investment. Enron took advantages of deregulation of the US energy markets, as later on, it can be noticed that they enjoyed the experience of steadily rising profit from merger of two utility based companies. Additionally, besides owning several gas pipelines, it also ran a natural gas as well as electricity transmission business. After 1985, Enron even started trading in gas and offered various types of derivates to interested customers, when the gas pipelines business met an end. When the derivatives

European Law essay Example | Topics and Well Written Essays - 2000 words

European Law - Essay Example It is agreeable that legal cooperation and integration is the most important premise for political and economic integration. There should be horizontal and vertical legal cooperation and integration; that is, among member states themselves, as well as between the Union and its member states. This means that such integration should be in such a way that, despite the fusion of legal processes, each state do not lose their individual legal characteristics.1 It is in the light of this that a question arises of how supreme law can be established while each state still maintains their inherent laws. In practice and theory, this question point at two most crucial European Law doctrines: the doctrines of â€Å"supremacy† and â€Å"subsidiarity†.2 So, how is the doctrine of â€Å"supremacy† and â€Å"subsidiarity† developing and how can it address the question of enforceability of directives by individuals? The Doctrine of â€Å"Supremacy† The doctrine of â €Å"supremacy† is one of the basic principles of EU law that was developed by the European Court of Justice (ECJ) in the Costa v Enel [1964]3 to ensure supremacy of EU laws over individual member states law. The development of this doctrine was based on the pacta sunt servanda principle that the EU laws should not be prejudiced by national laws. Since the EU laws respect the fundamental rights, the ECJ is of the opinion that member states should not prejudice EU laws under the excuse of protecting human rights. The ECJ’s ruling followed the principle that the courts of individual member states must not apply national laws that are not consistent to EU Laws. The EU Treaty provides the EU laws with supremacy over individual states laws.4 It should be noted that the doctrine of supremacy of the EU law is a debatable concept that is still evolving. Since the ruling in Costa v Enel, there have been various reactions to the opinion held therein. The ruling has been challenge d in the members’ states constitutional courts, as noted in German Constitutional Courts in the case of Spa Granital v. Amministrazione delle Finanze dello Stato5. In the case, it was held that Community law should be given precedence because of its competence over any relationship aspect between national law and Community law. Also, the Treaty of the European Union has been challenged through a series of Maastricht cases. The enforceability of the doctrine of supremacy directives by individuals is very possible. However, such enforceability is only within the ECJ’s conditional jurisdiction; in some cases, EU laws do not have direct effects to the national Acts hence implying that its provisions cannot be enforced in such circumstances.6 The Doctrine of â€Å"Subsidiarity† The Maastricht Treaty on European Union (TEU) sets out that the doctrine of subsidiarity enjoins the European Community to act in areas where there is concurrent competence. The doctrine requi res the EU institutions to refrain from acting in situations where their objectives can be served effectively at member state level. This doctrine is informed by the need to ensure that the EU laws do not trample on the principles of cultural diversity and democratic self- governance, needlessly. This doctrine implies that the EU will only act when the individual members states action are deemed to