Open Access. Powered by Scholars. Published by Universities.®
- Keyword
-
- Public debts (60)
- Debt relief (52)
- Financial crises (47)
- Risk management (26)
- Public finance (24)
-
- Bonds (23)
- Financial risk management (22)
- Risk assessment (22)
- Default (Finance) (20)
- Debtor and creditor (18)
- Bailouts (Government policy) (16)
- Money market (16)
- United States (14)
- Eurozone (13)
- Dodd-Frank Wall Street Reform and Consumer Protection Act (12)
- Government bonds (12)
- Asset-based financing (11)
- Banks and banking (10)
- Corporations (10)
- International finance--Law and legislation (10)
- Banking law (9)
- Corporate governance (9)
- Mortgage-backed securities (9)
- Risk (9)
- Bankruptcy (8)
- Administrative law (7)
- Financial institutions (7)
- International finance (7)
- Securities (7)
- Contracts--Interpretation and construction (6)
Articles 151 - 177 of 177
Full-Text Articles in Entire DC Network
The Return Of The Rogue, Kimberly D. Krawiec
The Return Of The Rogue, Kimberly D. Krawiec
Faculty Scholarship
The “rogue trader”—a famed figure of the 1990s—recently has returned to prominence due largely to two phenomena. First, recent U.S. mortgage market volatility spilled over into stock, commodity, and derivative markets worldwide, causing large financial institution losses and revealing previously hidden unauthorized positions. Second, the rogue trader has gained importance as banks around the world have focused more attention on operational risk in response to regulatory changes prompted by the Basel II Capital Accord. This Article contends that of the many regulatory options available to the Basel Committee for addressing operational risk it arguably chose the worst: an enforced selfregulatory …
The Coroner’S Inquest: Ecuador’S Default And Sovereign Bond Documentation, Mitu Gulati, Lee C. Buchheit
The Coroner’S Inquest: Ecuador’S Default And Sovereign Bond Documentation, Mitu Gulati, Lee C. Buchheit
Faculty Scholarship
Conventional wisdom is that sovereigns will rarely, if ever, default on their external debts in circumstances where it is clear that they have the capacity to pay. The first line of defense against the errant sovereign is its concern about reputation. It may have to tap the external debt markets again in the future; and there is the fear that the markets will extract revenge. But reputational constraints do not always work because some governments heavily discount future costs in favor of current benefits. When reputational constraints fail, however, a second line of defense is supposed to come into play. …
The ‘Principles’ Paradox, Steven L. Schwarcz
The ‘Principles’ Paradox, Steven L. Schwarcz
Faculty Scholarship
This essay, prepared for a University of Cambridge conference on ‘Principles Versus Rules in Financial Regulation’, posits a new issue in that debate. Although principles-based regulation is thought to more closely achieve normative goals than rules, the extent to which that occurs can depend on the enforcement regime. A person who is subject to unpredictable liability is likely to hew to the most conservative interpretation of the principle, especially where that person would be a potential deep pocket in litigation. This creates a paradox: unless protected by a regime enabling one in good faith to exercise judgment without fear of …
Keynote Address: The Case For A Market Liquidity Provider Of Last Resort, Steven L. Schwarcz
Keynote Address: The Case For A Market Liquidity Provider Of Last Resort, Steven L. Schwarcz
Faculty Scholarship
This short paper, prepared as a keynote address, explains why the credit crunch is fundamentally a story about financial markets, not banks. Its cause was a collapse of securitization and other debt markets, which have become major sources of financing for consumers and companies. Deprived of this financing, consumers have had difficulty purchasing homes and automobiles, and companies have had difficulty purchasing inventory and making capital investments, causing the real economy to shrink. This paper examines how these financial markets should be protected. Although already subject to many prescriptive regulatory protections, these markets evolve faster than regulation can adapt. The …
The Future Of Securitization, Steven L. Schwarcz
The Future Of Securitization, Steven L. Schwarcz
Faculty Scholarship
Securitization, a process in which firms can raise low-cost financing by efficiently allocating asset risks with investor appetite for risk, has been one of the most dominant and fastest-growing means of capital formation in the United States and the world. The subprime financial crisis, however, has revealed certain defects with how securitization is sometimes utilized. This article examines these defects and the extent they can, and should, be remedied going forward.
Keynote Address: Understanding The ‘Subprime’ Financial Crisis, Steven L. Schwarcz
Keynote Address: Understanding The ‘Subprime’ Financial Crisis, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.
Regulating Complexity In Financial Markets, Steven L. Schwarcz
Regulating Complexity In Financial Markets, Steven L. Schwarcz
Faculty Scholarship
As the financial crisis has tragically illustrated, the complexities of modern financial markets and investment securities can trigger systemic market failures. Addressing these complexities, this Article maintains, is perhaps the greatest financial-market challenge of the future. The Article first examines and explains the nature of these complexities. It then analyzes the regulatory and other steps that should be considered to reduce the potential for failure. Because complex financial markets resemble complex engineering systems, and failures in those markets have characteristics of failures in those systems, the Article‟s analysis draws on chaos theory and other approaches used to analyze complex engineering …
Systemic Risk, Steven L. Schwarcz
Systemic Risk, Steven L. Schwarcz
Faculty Scholarship
Governments and international organizations worry increasingly about systemic risk, under which the world’s financial system can collapse like a row of dominoes. There is widespread confusion, though, about the causes and even the definition of systemic risk, and uncertainty about how to control it. This Article offers a conceptual framework for examining what risks are truly “systemic,” what causes those risks, and how, if at all, those risks should be regulated. Scholars historically have tended to think of systemic risk primarily in terms of financial institutions such as banks. However, with the growth of disintermediation, in which companies can access …
Disclosure’S Failure In The Subprime Mortgage Crisis, Steven L. Schwarcz
Disclosure’S Failure In The Subprime Mortgage Crisis, Steven L. Schwarcz
Faculty Scholarship
This symposium article examines how disclosure, the regulatory focus of the federal securities laws, has failed to achieve transparency in the sub-prime mortgage crisis and what this failure means for modern financial securities markets.
Bond Defaults And The Dilemma Of The Indenture Trustee, Steven L. Schwarcz, Gregory M. Sergi
Bond Defaults And The Dilemma Of The Indenture Trustee, Steven L. Schwarcz, Gregory M. Sergi
Faculty Scholarship
The standard of care for indenture trustees after default is intolerably vague, generating cost and inefficiency in the public bond markets. Yet public bondholder governance is increasingly recognized as a critical component of the larger realm of corporate governance, and indeed more than eighty percent of capital market financing raised by U.S. corporations now occurs through public bond offerings. This article examines how that standard of care should be modified to make indenture trustees more effective.
A Convenient Untruth: Fact And Fantasy In The Doctrine Of Odious Debts, Sarah Ludington, Mitu Gulati
A Convenient Untruth: Fact And Fantasy In The Doctrine Of Odious Debts, Sarah Ludington, Mitu Gulati
Faculty Scholarship
The few years since the U.S. incursion into Iraq in 2003 have witnessed an explosion in the literature on odious debts - that is, debts incurred (a) without the consent of the people (e.g., by a despotic regime); (b) from which no benefits accrued to the people; and (c) when the creditors had knowledge of the foregoing. The key question in the literature is whether successors to the despotic regime are obligated to pay the debts of the despot. That is, whether the newly democratic nation of Iraq is obligated to pay the debts of Saddam Hussein. The starting point …
Protecting Financial Markets: Lessons From The Subprime Mortgage Meltdown, Steven L. Schwarcz
Protecting Financial Markets: Lessons From The Subprime Mortgage Meltdown, Steven L. Schwarcz
Faculty Scholarship
Why did the recent subprime mortgage meltdown undermine financial market stability notwithstanding the protections provided by market norms and financial regulation? This article attempts to answer that question by identifying anomalies and obvious protections that failed to work, and then by examining hypotheses that might explain the anomalies and failures. The resulting explanations provide critical insights into protecting financial markets.
Markets, Systemic Risk, And The Subprime Mortgage Crisis, Steven L. Schwarcz
Markets, Systemic Risk, And The Subprime Mortgage Crisis, Steven L. Schwarcz
Faculty Scholarship
The recent subprime mortgage meltdown is undermining financial market stability and has the potential to cause a true systemic breakdown, collapsing the world's financial systems like a row of dominoes. This essay uses the subprime crisis to demonstrate that existing protections against systemic risk, which focus on banks and largely ignore financial markets, are anachronistic and misguided. Because companies increasingly access financial markets without going through banks, an effective framework for containing systemic risk must focus on markets.
Odious Debts And Nation-Building: When The Incubus Departs, Mitu Gulati, Lee C. Buchheit
Odious Debts And Nation-Building: When The Incubus Departs, Mitu Gulati, Lee C. Buchheit
Faculty Scholarship
No abstract provided.
The Confused U.S. Framework For Foreign-Bank Insolvency: An Open Research Agenda, Steven L. Schwarcz
The Confused U.S. Framework For Foreign-Bank Insolvency: An Open Research Agenda, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.
The Limits Of Lawyering: Legal Opinions In Structured Finance, Steven L. Schwarcz
The Limits Of Lawyering: Legal Opinions In Structured Finance, Steven L. Schwarcz
Faculty Scholarship
Significant controversy surrounds the issuance of legal opinions in structured finance transactions, particularly where accountants separately use these opinions, beyond their traditional primary use, for determining whether to characterize the transactions as debt. Reflecting at its core the unresolved boundaries between public and private in financial transactions, this controversy raises important issues of first impression: To what extent, for example, should lawyers be able to issue legal opinions that create negative externalities? Furthermore, what should differentiate the roles of lawyers and accountants in disclosing information to investors? Resolution of these issues not only helps to demystify the mystique, and untangle …
Looking Forward: 2005-2010 - A Sovereign Debt Restructuring Reverie, Steven L. Schwarcz
Looking Forward: 2005-2010 - A Sovereign Debt Restructuring Reverie, Steven L. Schwarcz
Faculty Scholarship
In a prior article, the author asked why, if a sovereign debt restructuring treat would be effective and easy to implement, one does not yet exist. There appeared to be at least three reasons: the very novelty of the approach; the opposition of interest groups who believe that a treaty approach would make it too easy for sovereign debtors to default; and the failure of parties to appreciate the importance of a treaty approach, coupled with concern over ceding sovereignty. In this short reverie, the author hopes to show that these reasons are flawed and that, even where bond issues …
The Muddled Duty To Disclose Under Rule 10b-5, Donald C. Langevoort, G. Mitu Gulati
The Muddled Duty To Disclose Under Rule 10b-5, Donald C. Langevoort, G. Mitu Gulati
Faculty Scholarship
No abstract provided.
Sovereign Debt Reform And The Best Interest Of Creditors, William W. Bratton, G. Mitu Gulati
Sovereign Debt Reform And The Best Interest Of Creditors, William W. Bratton, G. Mitu Gulati
Faculty Scholarship
In April 2002 the International Monetary Fund introduced a sovereign bankruptcy proposal only to be rebuffed by the United States Treasury. Where the IMF wanted a mandatory bankruptcy regime, the Treasury wanted to solve distress problems with contractual devices. Sovereign bondholders and sovereign issuers themselves flatly rejected both proposals, even though they were nominally the beneficiaries of both proponents. This Article addresses and explains this bondholder reaction. In so doing, it takes a highly skeptical view of the IMF's proposal even as it shows that the incentive structure surrounding sovereign lending renders untenable the Treasury's contractarian proposal. The Article's analysis …
Sovereign Bonds And The Collective Will, Lee C. Buchheit, G. Mitu Gulati
Sovereign Bonds And The Collective Will, Lee C. Buchheit, G. Mitu Gulati
Faculty Scholarship
No abstract provided.
Derivatives, Corporate Hedging, And Shareholder Wealth: Modigliani-Miller Forty Years Later, Kimberly D. Krawiec
Derivatives, Corporate Hedging, And Shareholder Wealth: Modigliani-Miller Forty Years Later, Kimberly D. Krawiec
Faculty Scholarship
No abstract provided.
Rethinking The Role Of Recourse In The Sale Of Financial Assets, Steven L. Schwarcz, Peter V. Pantaleo
Rethinking The Role Of Recourse In The Sale Of Financial Assets, Steven L. Schwarcz, Peter V. Pantaleo
Faculty Scholarship
The presence of recourse in the sale of a financial asset is generally thought to jeopardize the "true sale" treatment of the sale, especially in the event of the seller's bankruptcy. This article examines the existing law and concludes that a transfer that qualifies as a sale under state law should be treated as a sale even if the buyer retains recourse to the seller, so long as recourse is limited to warranting that the asset will perform in accordance with its terms.
The Global Alchemy Of Asset Securitization, Steven L. Schwarcz
The Global Alchemy Of Asset Securitization, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.
Administrative And Judicial Review Of Prompt Corrective Action Decisions By The Federal Banking Regulators, Lawrence G. Baxter
Administrative And Judicial Review Of Prompt Corrective Action Decisions By The Federal Banking Regulators, Lawrence G. Baxter
Faculty Scholarship
No abstract provided.
Rule Of Too Much Law? The New Safety/Soundness Rulemaking Responsibilities Of The Federal Banking Agencies, Lawrence G. Baxter
Rule Of Too Much Law? The New Safety/Soundness Rulemaking Responsibilities Of The Federal Banking Agencies, Lawrence G. Baxter
Faculty Scholarship
No abstract provided.
Judicial Responses To The Recent Enforcement Activities Of The Federal Banking Regulators, Lawrence G. Baxter
Judicial Responses To The Recent Enforcement Activities Of The Federal Banking Regulators, Lawrence G. Baxter
Faculty Scholarship
No abstract provided.
The Impact Of Fraudulent Conveyance Law On Future Advances Supported By Upstream Guaranties And Security Interests, Steven L. Schwarcz
The Impact Of Fraudulent Conveyance Law On Future Advances Supported By Upstream Guaranties And Security Interests, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.