Legitimacy and governability in financial regulation

Abstract

THE RELATION BETWEEN LAW AND ECONOMICS MIGHT RESULT IN AN OPPOSITION BETWEEN GOVERNABILITY AND LEGALRATIONAL LEGITIMACY, SINCE THEY ARE BASED IN DIFFERENT RATIONALITIES. JUDICIAL REVIEW OF FINANCIAL REGULATION SHOWS THAT COFLICT, WHICH IS HERE ANALYSED FROM THE VIEWPOINT OF THE CONSTITUTIONAL JURISPRUDENCE OF THE BRAZILIAN SUPREME COURT (SUPREMO TRIBUNAL FEDERAL – STF). IN BRIEF, THE PURPOSE OF THIS ARTICLE IS TO IDENTIFY THE OPPOSTION BETWEEN GOVERNABILITY AND THE NEED FOR LEGAL-LEGITIMACY IN THE CASES ANALYSED BY THE COURT CONCERNING FINANCIAL REGULATION. THE CASE STUDIES SHOW THAT THE JUDICIAL REVIEW BY STF HAS REJECTED ECONOMIC ASPECTS OF THE CASE, HOWEVER IT HAS PRESERVED GOVERNABILITY RATIONALITY WITH INCOHERENT AND CONTRADICTORY DECISIONS BASED ON FORMAL ARGUMENTS. THEREBY, IT IS POSSIBLE TO IDENTIFY THE INSTITUTIONAL ROLE GRANTED BY STF TO THE BRAZILIAN CONSTITUTION DATED FROM 1988, CONSIDERING THE CONTEXT OF ECONOMIC CRISIS EXPERIMENTED BY BRAZIL IN THE 80’S AND THE 40TH AMEDMENT.