Lost in conversion: rethinking investment treaty protection against retroactive regulation in the wake of the ‘Francogeddon’

Abstract The Swiss National Bank’s abrupt abandonment of the Franc–Euro (CHF–EUR) exchange rate peg in 2015 unleashed a financial shockwave—dubbed ‘Francogeddon’—that continues to reverberate a decade later. While the immediate crisis has subsided, its aftermath continues to affect hundreds of thousands of mortgage holders with CHF-denominated loans and several of their home States. In response to that fallout, countries such as Croatia and Montenegro mandated the retroactive conversion of CHF loans into local currency, prompting however a series investment claims by foreign banks. Using these disputes as an entry point, this article examines the treatment of currency and exchange rate interventions under international investment law, and canvasses two relatively underexplored dimensions of regulatory interference within the fair and equitable treatment standard: the retroactive nature of financial restructurings and the due diligence obligations of investors marketing complex financial products. It contextualizes these issues within the broader debates over the concept of stability in investment law, and presents a typology of the different approaches, probing into their content and normative justifications. The article ultimately reflects on the implications of these controversial issues for adjudicating disputes in a world increasingly shaped by financial (and other) crises.