Publications of Tajti, T.

Tajti T. Regulatory- and other Forms of Capture in Law. In: Gardašević Đ, Gotovac V, Zrinščak S, editors. Pravo i Društvo - Liber Amicorum Josip Kregar. Vol first. Zagreb, Croatia: Zagreb University Law School, Croatia - Pravni fakultet Sveučilišta Zagreb, Hrvatska; 2022. p. 441-67.

Regulatory- and other Forms of Capture in Law

ABSTRACT The article aims to cast a closer light on regulatory capture, one of the ‘regulatory’ neologisms that besides the categories of ‘regulatory state,’ ‘regulatory competition,’ or ‘regulatory arbitrage’ play an increasingly important role in contemporary legal systems; often unnoticedly. Clarification, and facing the challenges regulatory capture creates is of utmost importance especially for fledgling regulatory systems in which as a rule the phenomenon has not even been identified. Though grasping what is exactly hidden behind the concept is far from being crystal clear even in the United Kingdom and the United States that are traditionally taken as the prototypes of regulatory states and also the countries where most of the examples of the garden variety of regulatory captures have been unearthed and targeted by legal and scholars of other disciplines. Besides canvassing the various scholarly explanations of the phenomenon of regulatory capture, the paper juxtaposes it to other forms of captures appearing in law as well yet again to support the main argument of the aper that regulatory capture in strict sense should be carefully delimited from kin phenomena. This is achieved through selected examples from the United States and from the post-socialist states of Central Europe (Croatia and Hungary) from the realms of capital markets regulations, secured transactions law, as well as law reforms (privatization of bailiff systems).

Pyramid and Ponzi schemes and the repercussions of the differing regulatory approaches Hungarian developments in the light of contemporary global trends

ABSTRACT Apart from a few shorter papers inspired by the nomination of a new crime prohibiting the organization of ‘pyramid games’ by the Hungarian Criminal Code in 1996, the topic of ‘pyramid and Ponzi schemes’ remained of little interest to Hungarian legal scholars. Internationally, the topic has garnered increased attention due to the grave socio-economic effects of ever newer scheme-collapses, from the high-profile American Madoff (2009) to the myriad less-known cases from emerging systems like the fiasco of the Albanian pyramid schemes in the mid-1990s, pyramid schemes camouflaged as multi-level marketing (MLM) ventures, or their online versions more recently. Comparative works that would juxtapose the pertaining laws and experiences of the United States with those of Hungary are lacking. To fill the void, this article contrasts a select number of differing regulatory approaches. At one end of the spectrum is the United States (US), which, instead of passing sector-specific laws, mobilized and adapted the enforcement tools of all utilizable branches of law to combat the schemes. While in the US this has been uniquely primed by securities laws, in Hungary the task remains limited to what criminal law and the criminal justice system could offer, coupled with the dominantly ad hoc reactions of the Hungarian Securities and Exchange Commission (SEC). Development of tests to distinguish legitimate Multi-Level Marketing (MLM) companies from pyramid schemes disguised as such represents the only segment where significant rapprochement occurred between the US, the European Union (EU) and therefore also Hungary. For contrast and illustration of the other end of the spectrum, the systems that were forced to react torisks corollary to the schemes by enacting sector-specific laws, the most recent regulatory reactions of India, Myanmar, and Sri Lanka had to be resorted to. As the latter two imposed complete bans on all MLMs, it is only the Indian 2019 comprehensive act that attempts to combat the schemes and akin forms of financial fraud relying on a new comprehensive regulatory model. The Philippines is an interesting mixture made of local and transplants that readily proves that thesolutions of the most developed US system could successfully be transplanted into a significantly different socio-economic environment.

Tajti T. MULTILEVEL MARKETING AND PYRAMID SCHEMES. In: The Protection of the Collective Interests of Consumers. Belgrade, Serbia: UNION University, Belgrade, Serbia; 2021. p. 46-64.


MULTILEVEL MARKETING AND PYRAMID SCHEMES Abstract: Multi-level marketing is one of those business concepts that has become popular virtually in all European post-socialist systems at the beginning of their transition towards market economies; including the Western Balkans. Although hundreds of consumers have become members of their variants, and many have also suffered losses within a short time span, this has occurred virtually unnoticed by the local lawmakers. Hardly has the regulatory inertia been changed by now save the countries that have in the meantime acceded the European Union that possesses the “4Finance UAB” test to differentiate legitimate MLM ventures from disguised pyramid schemes quite similarly to the earlier ‘Amway Test’ of the Federal Trade Commission of the United States. Besides presenting these topics and filling a gap in legal scholarship, the article reflects on the reasons why more attention should be devoted to these developments by regulators being sensitive to the collective rights of consumers. Key words: multi-level marketing (MLM), pyramid schemes, naked pyramid schemes, Ponzi schemes, financial regulation, consumer protection, Amway test, ‘4finance UAB’ test, European Union law.


The article explores the key factors that make the securities criminal law of the United States (US), as one of the integral building blocks of the capital markets and securities regulatory system, efficient. This includes the role and characteristics of sectoral (blanket) all-embracing securities crimes enshrined into the federal securities statutes, their nexus with general crimes, the close cooperation of the Securities Exchange Commission (SEC) and prosecutorial offices, the applicableevidentiary standards, and the fundamental policies undergirding these laws. The rich repository of US experiences should be instructive not only to the Member States of the European Union (EU) striving to forge deeper capital markets but also to those endeavoring to accede the EU (e.g., Serbia), or to create deep capital markets for which efficient prosecution of securities crimes is inevitable.

Tajti T. Fintech Regulation in Hungary. In: Cian M, Sandei C, editors. Diritto del Fintech. 1st ed. Milano: Wolters Kluwer Italy - CEDAM; 2020. p. 601-20.
Tajti T. Are Some Classes of Consumer-Investors of Collapsed Pyramid and Ponzi Schemes Vulnerable? A Multi-Jurisdictional Perspective . In: Stanescu C, Gikay A, editors. Discrimination, Vulnerable Consumers and Financial Inclusion Fair Access to Financial Services and the Law. first ed. United Kingdom: Routledge; 2020. p. 236-88.

Unprotected Consumers in the Digital Age: the Consumer-creditors of Bankrupt, Abandoned, Defunct and of Zombie Companies

The aim of this article1 is to draw the attention of comparative scholars, researchers and policy-makers to the inferior position of consumer-creditors in bankruptcy proceedings, a topic that escaped attention during the development of financial protection of consumers in Europe. Consumers may become creditors if they prepay certain goods or services that remain undelivered following bankruptcy of a retailer or service-provider. The problem that results is that consumer-creditors are treated as unsecured creditors in bankruptcy law, who rank very low on the priority ladder and are doomed to recover only a small fraction of their claims, if anything at all. In order to fill the vacuum, the article attempts to map the real dimensions of the consumer-creditor problem first by outlining the spectrum of bankruptcy cases involving consumer-creditors and the threats to consumers inherent to abandoned and defunct companies that are usually left without assets creditors could collect upon. This includes case studies of major recent bankruptcies caused by appearance of new technologies (e.g., the collapse of UK Farepak due to appearance of Internet-based competitors) and linked abuses (web-fraudulent schemes). The second part of the article provides an overview of the regulatory responses, ranging from the prescriptive approach of US law implementing limited high priority to consumer-creditors in bankruptcy proceedings in the 1970s, the 2016 multi-pronged proposals of the UK Law Commission, to the specific regulatory responses of selected post-socialist systems, like the blocked accounts introduced by Croatia and Serbia, the forced deletions of Hungary and the special tax imposed in Slovakia.

The impact of technology on access to law and the concomitant repercussions: past, presence, and the future (from the 1980s to present time)

Abstract That technology increasingly impacts everything that is linked to law—from access to law, legal education, the services provided by the legal industry, and, increasingly, even adjudication (in-court or via alternative dispute resolution)—is a fact. The role that technology plays in these contexts varies, yet one may safely presume that the influence will intensify. In order to reflect on the future, this article canvasses and tries to draw some conclusions based on the comparison of accessibility to foreign and local law in the hard copy versus the digital and Internet-based, as well as the recently unfolding era of algorithms. The examples range from the curious encounter of Central and Eastern European socialist enterprises and law students with punitive damages and strict tortious liability known in the USA through the most recent launching of the first transnational letter of credit transaction exploiting blockchain technology. The advancements generated by technology advancements in these three stages are then reflected upon primarily from the perspectives of (i) researchers and lecturers of law as well as legal education; (ii) company boards and managements (especially foreign market-oriented business firms) formulating their business policies; and (iii) regulators as well as law and policymakers. The article concludes with thoughts on the broader implications of enhanced access to law. In particular, it posits that technology has made the shift from ‘mechanical’ to ‘analytic access to law’ possible. Yet it also raises the more fundamental question of whether the advancements denote, and the selected examples properly illustrate, that a more fundamental shift is unfolding: a shift from governance by law to governance by technology?


The perception and regulation of pyramid and Ponzi schemes, as specific forms of investment fraud, vary significantly around the globe today. Although no jurisdiction is immune from them, in some jurisdictions, they are among the top targets of financial supervisory agencies (e.g., United States), in others they are rather crimes perceived to be primarily in the bailiwick of public prosecutors (e.g., Germany). This difference is then reflected in the publicized records of detected cases. Special concerns apply to emerging financial systems that not only lack efficiently functioning sector-specific regulations and properly empowered agencies that could react in due time, but because of the comparatively lowest financial literacy of the populace - the potential investors - are also the most vulnerable to these types of financial pathology. It is not only that in these countries disgorgement of illegally obtained profits, fair funds or anything similar is unheard of, but typically no recovery could be expected in the often equally dysfunctional bankruptcy proceedings either that normally follow the schemes' collapse. The systemic risk that may be generated by schemes of magnitude similar to the Albanian pyramid schemes comes on top of all that. China, faced with the consequences of the recent Ezubao scheme, is only now to decide which path to take, though unfortunately the same could be said also as to many of Central and Eastern European jurisdictions as well. In light of these considerations, this paper aims to show that comparative law has what to offer in this domain by sketching a select number of schemes from China, Europe, and the United States together with their characteristic regulatory solutions. The central argument is that combating pyramid and Ponzi schemes cannot be left only to such classical branches of law as criminal, tort or contract law. Rather, they should directly be targeted by financial regulations, be in the purview of adequately empowered agencies and their investigation and prosecution ideally be entrusted to a specialist body (e.g., the UK Serious Fraud Office). Training of staff of these is inevitable as well because detection of schemes requires specialist expertise in finance as no scheme could be sold unless it looks like a legitimate business; a task that hardly could be entrusted to prosecutors trained to prosecute conventional crimes and to be adjudicated by generalist judges. Education of the investing public on top of that is as well a must. These tested tools notwithstanding, as sketched by the article, even some developed financial systems lack adequate regulatory responses, let alone the emerging ones.

Tajti T. Shareholders' Agreements in Hungary - National Report. In: International Handbook on Shareholders' Agreements - Regulation, Practice and Comparative Analysis. Vol I. Berlin/Boston: De Gruyter; 2018. p. 335-89.
Tajti T. Diritto italiano in Ungheria (1861-2018). In: Sacco R, editor. Digesto delle discipline privatistiche - sezione civile - Aggiornamento XI. Vol XI.2018. Milan, Italy: Wolter Kluwer Italia - UTET Giuridica; 2018. p. 183-203.

Chinese Translation of the Article Bankruptcy Stigma and the Second Chance Policy: the Impact of Bankrutpcy Stigma on Business Restructurings in China, Europe and the United States

The article focuses on the impact of bankruptcy stigma on business restructurings and the desire of Europe as well as China to gradually implement the second chance policy known from the United States. The article originally written in English was translated by Li Zemin to Mandarin (Chinese) and was published in the leading Chinese language Bankruptcy Law Review the editor-in-chief of which is Professor Li Shuguang in 2018.


Annak ellenére, hogy a franchise – a lízinggel együtt – a két legsikeresebb jövevény szerződés egyike és fejlődését jelentős számú jogirodalmi publikáció követte, a franchise egy lényeges eleme – a franchise-aszimmetria – nem kapott kellő figyelmet. Vonatkozik ez az új Polgári törvénykönyvre (Ptk.) is, amelynek minimálisra kerekedett hat §-a a rendszerbe való bevezetésen kívül csak néhány főbb kötelezettség és jog deklarálására szorítkozik. Mivel a rendelkezések diszpozitívak, a franchise tartalommal való kitöltését a Ptk. valójában a gyakorlatra bízza, amiből az szűrhető le, hogy a jogalkotó nem számolt az aszimmetriával. Az aszimmetria olyan Janus-arcú, immanens része a franchise-nak, amely a jogra lényeges feladatokat hárít. Egyfelől, a franchise-ba adó fél információs és erőfölénye adott, és az ebből fakadó jogait a jognak bizonyos fokig garantálnia is kell, mivel ez az üzleti siker kulcsa. A jogbérletbe adó joga nemcsak a franchise-szerződés minden lényeges elemének a meghatározása, hanem a végrehajtásának szigorú ellenőrzése és akár szigorú szankcionálása is. Ez lényegében azt jelenti, hogy általában a franchise-ba adó diktál. Másfelől, az aszimmetriával a jogbérletbe adó vissza is tud élni, ahogyan ezt legszemléletesebben az amerikai tapasztalatok mutatják. A jog ellenkező előjelű feladata épp ezért a gyengébb fél védelme a jogbérletbe adói túlkapások és abúzusok ellen. A védelem lehet ad hoc jellegű, amikor a magánjog általános érvényű szabályaira alapozva hoz a bíróság a jogbérletbe adót elmarasztaló döntést, vagy a versenyjog eszköztárát mozgósítják e célból. A franchise szülőhazájában, az USA-ban azonban a jogbérletbe vevőt mint a gyengébb felet, már szektor-specifikus, kógens normákra építő törvényekkel védik. A cikk e paraméterek alapján próbál egy nemzetközi kitekintés útján rámutatni a franchise-aszimmetria magyar jog számára is fontos voltára.

Tajti T. National Report on Central and Eastern European Systems - Hungary, Poland and Lithuania. In: McCormack G, Bork R, editors. Security Rights and the European Insolvency Regulation. Vol one. Cambridge: Intersentia; 2017. p. 571-693. (NA; vol one).

Beszélhetünk-e a zálogjogi rendszerek versenyéről?

Is there a Global Competition of Secured Transactions Laws? Abstract While it has by now become commonly known, not only in Hungary and in the region but also in a growing number of jurisdictions worldwide, why are the reforms of secured transactions law of heightened importance, it is less known that, directly or indirectly, it is the so-called ’unitary concept of security interests’ enshrined in Article 9 of the Uniform Commercial Code of the United States of America has been increasingly the major source of inspirations. This model impacted most of the projects of various international organizations that were focused on this branch of law, including the most important recent vintage private law initiative of Europe, the Draft Common Frame of Reference,” Book IX of which (and partially also Book X on Trusts) came forward with a similar unitary model (though the commentaries do not mention any connection with the American model). At the same time, German law – that still ranks one of the major models in Europe – remained completely immune from these trends. As a result, German secured transactions law (Recht der Kreditsicherheiten) is a model offering solutions that are in many key respects the exact opposite of the American ones as a consequence of what it may be looked upon as the rival of the unitary model. As opposed to German law, English law, as another leading legal system, is far from being indifferent: the debate whether to embark on reforms along the lines of the unitary model (and to follow the suit of Australia, the Canadian provinces and New Zealand) has been ongoing for more decades now. For the time being, the City of London – preferring the status quo and the ’if not broken, don’t mend it’ philosophy – has prevailed against a group of academics. In the light of these developments, this article is an attempt to answer the question whether there is a genuine competition among various national secured transactions law models given the numerous international projects and national law reforms? And if yes, is it possible to identify, and based on what criteria, which are the competing models? The article casts a light also on the possible economic repercussions of the competition. As the best illustration of the importance of the economy-secured transactions reform nexus suffice to point to the changed Chinese stance according to which it is, neither German, nor continental European (civil) law, the only source of inspirations for Chinese law-makers anymore; it is rather the model that could generate the most economic benefits for China. Consequently, it is not only capital markets and securities regulation but also bankruptcy and secured transactions law with respect to which the law of the United States is increasingly winning the ground in China. Having the increased economic and political importance of China in sight, it should come natural to presume that it should not be irrelevant to Europe either which secured transactions model is going to prevail in China and globally in the not so distant future.

Tajti T. Vagyonvédelem, hagyatéktervezés és a szindikátusi szerződések. Vol XVII. Mandoki I, editor. Budapest: Közjegyzői Akadémia Kiadó; 2016. (Studia Notarialia Hungarica; vol XVII).
Tajti T. The Dynamic Conception of Alternative Dispute Resolution. In: Alternative Means of Dispute Resolution in Business. Vol 1. first, 2015 ed. Vilnius, Lithuania: University Kazimiero Simonavičiaus, Vilnius, Lithuania; 2015. p. 177-200.

The Dynamic Conception of Alternative Dispute Resolution

ABSTRACT One could hardly contest that the English (and to a lesser extent other) language publications on alternative dispute resolution have significantly increased during the last few decades. This applies primarily to international commercial arbitration, though mediation – perhaps domestic rather than international – seems to have caught up lately as well. No matter whether books written by arbitrators or mediators are at stake, however, they suffer from a weakness this paper would like to focus upon: the static picture they present. The article vouches for a shift from a static to a dynamic perception of alternative dispute resolution for the 21st century. Contrary to what intuition would dictate, however, such a shift would require more than just adding a few more pages to the introductory, evolution-related parts of these works. The task would be rather to create a picture that would emphasize the presence of dynamic forces constantly reshaping the contours of ADR; both internally and externally. The paper, by no means a complete account of the topic, aims to cast a novel light on some of the entrenched assumptions characteristic to the ADR law by putting forward a number of historical and contemporary illustrations.

Tajti T. Chapter on Mediation in Hungary. In: Richbell D, editor. How to Master Commercial Mediation (CEU Library Code KJC 4169.H6 2015). United Kingdom: Bloomsbury; 2014. p. 435-40.
Tajti T. Italian Law in Hungary. Annuario di diritto comparato e di studi legislative. 2014;(November):451-88.
Tajti T. Italian Law in Hungary. Annuario di diritto comparator e di studi legislative . 2014;V( Il diritto Italiano in Europa (1861-2014) - Scienza, giurisprudenza, legislazione):451-88.
Tajti T. Neglected Challenges of Law in the 21st Century: Focus on Post-Socialist Central Europe. In: The Milestones of Law in the Area of Central Europe 2013. Bratislava: Comenius School of Law; 2013. p. 1014-26.

When and Why is the Rubberstamp of the European Union Insufficient? - Caveats to Systems on the Road towards the European Union

Due to the principle of subsidiarity, European Union law is inherently in¬complete. Hence, neither the transposition of the acquis communautaire, nor the law or impetuses coming from Brussels is a panacea to numerous real-life legal, economic or political problems not being focused upon by the Union. This is often forgotten not just by countries approaching the Union but also by the Member States. The article is a review of a number of such legal and economic challenges faced in particular by Central European and ex-Yugoslav successor states, from such new transplants as franchise through risks of the pyramid and Ponzi schemes from the realms of financial law.

Testing the equivalence of the new comprehensive Australian Personal Properties Securities Act, its Segmented European Equivalents and the Draft Common Frame of Reference

With the new Personal Property Securities Act 2009 (Cth) (‘APPSA’) Australia has become the fourth jurisdiction to embrace a comprehensive system of personal property security law (‘PPSL’). At its centre lies the concept of unitary security interests, the prototype for which was art 9 of the United States’ Uniform Commercial Code. This is a new page in the global regulatory competition in this domain, and is causing other countries to rethink their unsystematised and hence less predictable and less competitive laws. This applies especially to fragmented Europe, which should pay increased attention to these Australian developments as they represent a gradually emerging international standard for access to financing (especially by small and medium size businesses), attraction of capital and economic growth. Only some have heeded this message, as illustrated by reforms in France and Central and Eastern Europe, as well as by Book IX of the recent soft law equivalent of a pan-European Civil Code, the Draft Common Frame of Reference. There is meaningful resistance, as the City of London’s successful blocking of realignment with the Unitary Model shows. It is less known, however, that quite a number of European national laws possess ‘segments’ of PPSL resembling the new Australian system. This article offers the first holistic comparison of the two continents’ PPSLs for the benefit of comparative lawyers and practitioners.

Consignments and the draft common frame of reference

Abstract: One of the novelties of Book IX of the most recent achievement of European efforts aimed at harmonization of private laws, the Draft Common Frame of Reference, concerns the subjection of some types of consignments to secured transactions law. The paper endeavors to unearth, what main dilemmas are corollary to, and what factors may justify transplantation of a solution from a system based on ‘functional approach’ – Article 9 of the American Uniform Commercial Code – into a law predominantly still based on system thinking (legal dogmatism). Key words: consignment, harmonization of European private law, Draft Common Frame of Reference, Uniform Commercial Code of the United States of America, consignment as a secured transaction, transplantation, function approach, legal dogmatism, behavioral economics, ostensible ownership (false wealth), purchase-money security interest, priorities, trust receipts, second generation of financiers.

Tajti T. Hungary. In: Ciacchi SWAC, Ciacchi AC, editors. Regulating Unfair Banking Practices in Europe - the Case of Personal Suretyships . Oxford: Oxford University Press; 2010. p. 303-39.

The case law of Central & Eastern Europe : enforcement of contracts

Enforcement of contracts in Albania, Czech Republic, Hungary, Lithuania, Republic of Moldova, Poland, Romania, Russia, Serbia, Ukraine

Tajti T, Messmann S. The Case Law of Central and Eastern Europe: Enforcement of Contracts - Preface and Introduction. In: Tajti T, Messmann S, editors. The Case Law of Central and Eastern Europe - Enforcement of Contracts. Bochum: European University Press; 2009. p. 11-39. (European Law & Economics).
Tajti T. The Trento Project : the way to rediscover each other in Europe and beyond. In: Bussani M, Mattei U, editors. Opening up European law : the common core project towards Eastern and South Eastern Europe. Berne: Stämpfli; 2007. p. 141-73.
Introduction. In: Messmann S, Tajti T, editors. The Case Law in Central and Eastern Europe: Leasing, Piercing the Corporate Veil and the Liability of Managers and Controlling Shareholders, Privatization, takeovers and the Problem with Collateral Law. Bochum: European University Press; 2007. p. 15-32.
Introduction. In: Messmann S, Tajti T, editors. Investing in South Eastern Europe. Foreign Direct Investment in the Stability Pact Countries. Bochum: European University Press; 2005. p. 4-44.


[This paper is an attempt to draw the attention of international corporate governance scholarship to the neglected emerging markets of Central and Eastern Europe, which are not just capable of enriching the treasury boxes of corporate governance with unique experiences but which are also in need of assistance in creating a growth-boosting corporate governance culture. To back up these contentions and to break the path to corporate governance in the region a selected number of examples is discussed and tentatively put into the framework of modern corporate governance. The examples come from two neighboring countries of the region, which notwithstanding of their geographic proximity are to be placed - according to most criteria - on the opposite ends of the pendulum, as while Hungary has already become a Member State of the European Union and is well ahead in creating a functioning market economy, Serbia has only recently set the transitory ball into rolling. Yet they seem to share at least partly a common problem: in neither of them does corporate governance enjoy the eminence it should; especially with regard to its potential growth-fostering effect. The examples discussed also prove that a substantial number of gaps, inconsistencies and dilemmas plaguing or preventing efficient corporate governance exist. All the blank spots or pathological phenomena are potential agenda items for a corporate governance program devoted to the region. The empirical evidence - many of which was simply left out from the few available documents devoted to this specific corner of contemporary world - serve also the end to show that the way companies are run in the region cannot be understood without paying equal attention to all the formants of corporate governance including the legal, economical, social and political environment. In particular special attention should be given to pathological phenomena that have emerged due to imbedded legacies from the - in the case of the region - socialist past. The idea is to show that it does make sense to discuss the applicability of the ideas of Berle & Means in the context of transitory countries. Or that it is both possible and profitable to work out a map of known local governance patterns and to allow these countries to learn from western experiences. In sum, this paper wishes to highlight that corporate governance could, on one hand, gain a lot from focusing more on these countries, and on the other hand, it could also contribute to their efforts aimed at building up of a working market economy by the mechanisms of corporate governance. I

Tajti T. Secured transactions and financial contracts in Hungary on the eve of joining the European Union. In: Bussani M, Fiorentini F, editors. I contratti di finanziamento e le garanzie reali nella prospettiva europea. Trieste: University of Trieste; 2003. p. 107-49.

Comparative secured transactions law

Harmonization of the law on security interests in the United States of America, Canada, England, Germany and Hungary

Tajti T. Comparative Secured Transactions Law. 1st ed. Budapest, Hungarzy: Akadémiai Kiadó, Budapest; 2002.

Viehweg's Topics, Article 9 UCC, the 'kautelarische Sicherheiten' and the Hungarian Secured Transactions Law Reform

It goes without saying that secured transactions law is one of those emerging and growing legal disciplines which has attracted the most attention during the 1990s on all levels. Despite some encouraging developments and first steps taken in introducing new secured transactions laws, all the transitory economies of most Central and Eastern European countries seem to suffer fromt he same malaise in this context. In a nutshell: system-oriented thinking and the inherent deference to "traditional legal principles" of civil law tend to stymie the creation of a high-quality legal framework inevitable for the gradual formation of credit economy. A credit economy, without which no market economy can exist, and without which hardly could such burning problems, as housing or the revival of the economy, be solved. In sum, "traditional legal rules", be they enshrined into civil codes, or just hovering somewhere in the vacuum, are not the tools for bringing about a credit economy. In order to effect the necessary changes, problem-oriented thinking should come to the forefront, to which the acceptability of even the tiniest technical details of a new law would not depend on whether the new solution could be brought under the penumbras of any of the "traditional legal principles", but rather whether innovation could in practice improve the conditions for extending credits. And eventually, to what extent can any one solution help solving the main policy aim, which I will refer to in a somewhat shorthand way as the creation of credit economy.