Does the Art Market Need Regulation?February 3, 2015 – In The News
Daniel Schnapp was quoted in the Blouin Artinfo article, “Does the Art Market Need Regulation?” Full text can be found in the February 3, 2015, issue, but a synopsis is below.
When one of the world’s most high-profile economists called for the art market’s regulation, as Nouriel Roubini did last month at the World Economic Forum in Davos, Switzerland, people listened. Roubini denounced the use of art “for tax avoidance and evasion.”
Daniel Schnapp, noted that “Perhaps what Roubini is calling for is greater regulatory oversight of the art market itself — so, for example, an administrative agency that will be tasked with overseeing transfers of art — but with other Congressional priorities that may be a stretch right now. It seems to me that the art market for the time being is going to continue to be either self-regulated or governed by laws that already exist, for example tort or contract laws that already play into the typical sale between an auction house and a purchaser and a dealer or a collector.”
Regardless of its potential size, the possible market for art-backed securities is another area that would fall under the purview of existing regulators. “Securitization of art may become a more fertile ground for regulation because it can be deemed within the province of securities regulators, and the government may determine that oversight of the securitization of art should not be treated differently than the securitization of other more traditional financial products,” Schnapp stated.