Finance and Financial Management Commons^™

The Duty To Manage Risk, A. Christine Hurt

Faculty Scholarship

No abstract provided.

4th And 205: How A Rush Of Global Comments Blocked The Sec’S First Attempted Punt Of Attorney-Client Privilege Under Sarbanes-Oxley, John Paul Lucci

Touro Law Review

No abstract provided.

Understanding The Differences Between Defined Benefit Pension And Defined Contribution, Emily G. Brown Jd, Jeanne Medeiros Jd

Pension Action Center Publications

In recent years, more and more employers are offering employees defined contribution plans instead of defined benefit plans. Although, there has been a shift away from the defined benefit pension plan, it is important for employees to understand the difference and value of both pension plans.

Each type of pension plan has both advantages and disadvantages. What may appear as an advantage to one person might seem to be a disadvantage to another person. For example, a person who spends all or most of her career with a single employer will have very different concerns from someone who changes jobs …

Understanding The Specialized Language Of Retirement Plans, Emily G. Brown Jd, Jeanne Medeiros Jd

Pension Action Center Publications

Whether you are a participant in a defined benefit plan or a defined contribution plan, the realm of pension benefits can be tricky and confusing to navigate. Some of the terminology used might be unfamiliar to the average person. This glossary of common terms associated with retirement plans is meant to serve as a helpful resource for plan participants.

Theories And Practices Of Islamic Finance And Exchange Laws: Poverty Of Interest, Ahmed E. Souaiaia

Ahmed E SOUAIAIA

Con El Euro, Sin El Euro... ¿O Contra El Euro?, Luis González Vaqué

Luis González Vaqué

The name 'euro' was officially adopted on 16 December 1995. The 'euro' was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the former European Currency Unit (ECU) at a ratio of 1:1 (US$1.1743). Physical euro coins and banknotes entered into circulation on 1 January 2002, making it the day-to-day operating currency of its original members.

LINK: http://fliphtml5.com/zxub/sjvx/basic

New York Stock Exchange, Bert Chapman

Libraries Faculty and Staff Scholarship and Research

Provides a historical overview of the origins and early development of the New York Stock Exchange.

Real Estate Investment By Bank Holding Companies And Their Risk And Return: Nonparametric And Garch Procedures, Scott Deacle, Elyas Elyasiani

Business and Economics Faculty Publications

We investigate the association between real estate investment by US Bank Holding Companies (BHCs) and their return, risk and risk-adjusted returns. Three portfolios are formed of BHCs according to whether they do or do not invest in real estate, strictness of the regulation on real estate investment and the ratio of real estate investment to assets. Wilcoxon tests of differences in portfolio returns, risk, risk-adjusted returns and value at risk between each pair of portfolios are conducted to determine how engagement in real estate, stricter regulation and increased real estate investment affect BHC performance. These effects are also investigated within …

Single Point Of Entry And The Bankruptcy Alternative, David A. Skeel Jr.

All Faculty Scholarship

This Essay, which will appear in Across the Great Divide: New Perspectives on the Financial Crisis, a Brookings Institution and Hoover Institution book, begins with a brief overview of concerns raised by the Lehman Brothers bankruptcy about the adequacy of our existing architecture for resolving the financial distress of systemically important financial institutions. The principal takeaway of the first section is that Title II as enacted left most of these issues unanswered. By contrast, the FDIC’s new single point of entry strategy, which is introduced in the second section, can be seen as addressing nearly all of them. The …

Putting Retirement At Risk: Has Financial Risk Exposure Grown More Quickly For Older Households Than Younger Ones?, Christian Weller, Sara Bernardo

Gerontology Institute Publications

Financial markets have been characterized by boom and bust cycles since the 1980s, while the responsibility for managing retirement wealth has increasingly shifted onto individual households at the same time. Policymakers and experts have expressed concern over rising risk exposure among older households, who appear to be increasingly exposed to the growing financial risks just as they near retirement. We consider household data from the Federal Reserve’s Survey of Consumer Finances from 1989 to 2010 to analyze the correlation between age and risk exposure. We test if older households’ risk exposure has indeed grown over time, if it has increased …

Global Expansion Of National Securities Laws: Extraterritoriality And Jurisdictional Conflicts, Junsun Park

The University of New Hampshire Law Review

[Excerpt] “As securities fraud has grown increasingly transnational, it has become necessary to expand the reach of anti-fraud provisions to persons and entities participating in global securities markets. So far, however, no single antifraud provision exists to govern the entire global marketplace. Although each country strives to combat international securities fraud by using its own regulatory regime, problems can develop when extraterritorial application of national securities laws leads to regulatory overlapping or conflicts. In light of these problems, it is necessary to set forth clear guidelines for determining whether national securities laws can apply extraterritorially and, if so, how far …

Market Efficiency And The Problem Of Retail Flight, Alicia J. Davis

Alicia Davis

In 1950, 91% of common stock in the U.S. was owned directly by individual investors. Today, that percentage stands at only 23%. The mass exodus of retail investors and their investment dollars has negative implications not only for capital formation and investor protection, but also for market efficiency. Individual investors are often assumed to be noise traders who distort stock prices and harm market functioning. Therefore, some argue that their withdrawal from the market should be of little concern; indeed, it should be celebrated. Recent empirical evidence calls this assertion of retail noise trading into doubt, and this paper, which …

The Future Of Fannie And Freddie, Mark A. Calabria, Michael E. Levine, David J. Reiss, Lawrence J. White, Mark Willis

David J Reiss

This is a transcript of a panel discussion titled, “The Future of Fannie and Freddie.” The panelists were Dr. Mark Calabria from the Cato Institute; Professor David Reiss from Brooklyn Law School; Professor Lawrence White from NYU Stern School of Business; and Dr. Mark Willis from NYU’s Furman Center for Real Estate and Urban Policy. The panel was moderated by Professor Michael Levine from NYU School of Law. Panelists looked at economic policy and future prospects for Fannie and Freddie. The remarks have not been edited by the panelists.

The Cape Town Convention’S Improbable-But-Possible Progeny Part One: An International Secured Transactions Registry Of General Application, Charles W. Mooney Jr.

All Faculty Scholarship

This essay is Part One of a two-part essay series. It outlines and evaluates two possible future international instruments. Each instrument draws substantial inspiration from the Cape Town Convention and its Aircraft Protocol (together, the “Convention”). The Convention governs the secured financing and leasing of large commercial aircraft, aircraft engines, and helicopters. It entered into force in 2006. It has been adopted by sixty Contracting States (fifty-four of which have adopted the Aircraft Protocol), including the U.S., China, the E.U., India, Ireland, Luxembourg, Russia, and South Africa.

A novel, distinctive, and path-breaking feature of the Convention is the international registry …

Using Tips To Discount To Present Value, Raymond Strangways, Bruce L. Rubin, Michael Zugelder

Finance Faculty Publications

The practice of forensic economics has a long history of trying to identify the correct interest rate to use when valuing economic losses in personal injury and wrongful death cases. We trace the legal history as it relates to the appropriate interest rates and adjustments for inflation. We then discuss the use of Treasury Inflation Protected Securities, TIPS, and an analysis of the combined effect of realized inflation and taxes on the effective return. We come to the unexpected conclusion that the use of TIPS does not lend itself to a simple adjustment to the rate for taxes nor eliminate …

Comments On The September 29, 2014 Fsb Consultative Document, ‘Cross-Border Recognition Of Resolution Action’, Steven L. Schwarcz, Mark Jewett, Bruce Leonard, Catherine Walsh, David Kempthorne

Faculty Scholarship

This CIGI Paper No. 51 was released on December 3, 2014 by the Centre for International Governance Innovation (CIGI) as a response to the Financial Stability Board’s (FSB) Consultative Document, “Cross-Border Recognition of Resolution Action.” Principally authored by CIGI Senior Fellow Steven L. Schwarcz (who works with the think tank’s International Law Research Program), the Paper comments on the policy measures proposed by the FSB, an international body that monitors and makes recommendations about the global financial system, to address the cross-border legal uncertainties of troubled systemically important financial firms. In that context, the Paper explains why a statutory approach …

The Bankruptcy-Law Safe Harbor For Derivatives: A Path-Dependence Analysis, Steven L. Schwarcz, Ori Sharon

Faculty Scholarship

U.S. bankruptcy law grants special rights and immunities to creditors in derivatives transactions, including virtually unlimited enforcement rights. This article argues that these rights and immunities result from a form of path dependence, a sequence of industry-lobbied legislative steps, each incremental and in turn serving as apparent justification for the next step, without a rigorous and systematic vetting of the consequences. Because the resulting “safe harbor” has not been fully vetted, its significance and utility should not be taken for granted; and thus regulators, legislators, and other policymakers—whether in the United States or abroad—should not automatically assume, based on its …

Regulating Systemic Risk In Insurance, Daniel Schwarcz, Steven L. Schwarcz

Faculty Scholarship

As exemplified by the dramatic failure of AIG, insurance companies and their affiliates played a central role in the 2008 global financial crisis. It is therefore not surprising that the Dodd-Frank Act—the United States’ primary legislative re-sponse to the crisis—contained an entire title dedicated to insurance regulation, which has traditionally been the responsibility of individual states. The most important insurance-focused reforms in Dodd-Frank empower the Federal Reserve Bank to impose an additional layer of regulatory scrutiny on top of state insurance regulation for a small number of “systemically important” nonbank financial companies, such as AIG. This Article argues, however, that …

Extraterritorial Impacts Of Recent Financial Regulation Reforms: A Complex World Of Global Finance, Lawrence G. Baxter

Faculty Scholarship

No abstract provided.

When Is A Dog’S Tail Not A Leg?: A Property-Based Methodology For Distinguishing Sales Of Receivables From Security Interests That Secure An Obligation, Steven L. Harris, Charles W. Mooney Jr.

All Faculty Scholarship

There are two principal ways in which a firm that is owed money payable in the future but needs the money now may use its rights to payment (“receivables”) to obtain the needed financing. It might sell its receivables, or it might borrow and use the receivables as collateral to secure the loan. Different legal consequences follow depending on whether the transaction is a true sale or is a security interest that secures an obligation (a “SISO”).

These legal consequences are particularly salient when the firm enters bankruptcy. If the transaction is a sale, then the buyer can collect the …

Harmonizing Choice-Of-Law Rules For International Insolvency Cases: Virtual Territoriality, Virtual Universalism, And The Problem Of Local Interests, Charles W. Mooney Jr.

All Faculty Scholarship

This paper explores the potential content and feasibility of a set of harmonized choice of law rules (HICOL Rules) that would apply in insolvency proceedings. It contemplates a main insolvency proceeding opened in a debtor’s center of main interests (“COMI”) and the existence of (or possibility of opening) one or more non-main (or secondary) proceedings. It also contemplates the possibility that an insolvency representative in a main or non-main proceeding may seek and be granted recognition in another state under the UNCITRAL Model Law on Cross-Border Insolvency (codified as Chapter 15 of the Bankruptcy Code in the U.S.) Under HICOL …

Behaviorism In Finance And Securities Law, David A. Skeel Jr.

All Faculty Scholarship

In this Essay, I take stock (as something of an outsider) of the behavioral economics movement, focusing in particular on its interaction with traditional cost-benefit analysis and its implications for agency structure. The usual strategy for such a project—a strategy that has been used by others with behavioral economics—is to marshal the existing evidence and critically assess its significance. My approach in this Essay is somewhat different. Although I describe behavioral economics and summarize the strongest criticisms of its use, the heart of the Essay is inductive, and focuses on a particular context: financial and securities regulation, as recently revamped …

Transnational Regulatory Regimes In Finance: A Comparative Analysis Of Their (Dis-)Integrative Effects, Katharina Pistor

Faculty Scholarship

Financial markets have become increasingly interconnected with financial intermediaries and instruments linking local and national markets to form regional or even global ones. The global financial crisis of 2008 demonstrated once more that financial interdependence can be both a blessing and a curse. It facilitates the movement of capital and the expansion of credit, and as such promotes economic development in good times; however, in bad times it transmits liquidity shortages throughout the system triggering financial crises and economic recessions where credit expansion earlier fuelled expansion and growth. A critical question therefore is how to structure the governance of transnational …

Managing Systemic Risk In Legal Systems, J.B. Ruhl

Vanderbilt Law School Faculty Publications

The American legal system has proven remarkably robust even in the face vast and often tumultuous political, social, economic, and technological change. Yet our system of law is not unlike other complex social, biological, and physical systems in exhibiting local fragility in the midst of its global robustness. Understanding how this “robust yet fragile (RYF) dilemma operates in legal systems is important to the extent law is expected to assist in managing systemic risk, the risk of large local or even system-wide failures in other social systems. Indeed, legal system failures have been blamed as partly responsible for disasters such …

Why Do Retail Investors Make Costly Mistakes? An Experiment On Mutual Fund Choice, Jill E. Fisch, Tess Wilkinson-Ryan

All Faculty Scholarship

There is mounting evidence that retail investors make predictable, costly investment mistakes, including underinvestment, naïve diversification, and payment of excessive fund fees. Over the past thirty-five years, however, participant-directed 401(k) plans have largely replaced professionally managed pension plans, requiring unsophisticated retail investors to navigate the financial markets themselves. Policy-makers have struggled with regulatory interventions designed to improve the quality of investment decisions without a clear understanding of the reasons for investor mistakes. Absent such an understanding, it is difficult to design effective regulatory responses.

This article offers a first step in understanding the investor decision-making process. We use an internet-based …