Law Commons^™

Do Accounting Rules Matter? The Dangerous Allure Of Mark To Market, Todd Henderson

Todd Henderson

This paper examines the relative strength of two imperfect accounting rules: historical cost and mark to market. The manifest inaccuracy of historical cost is well known, and, paradoxically one source of its hidden strength. Because private parties know of its evident weaknesses they look elsewhere for information. In contrast, mark to market for hard-to-value assets has many hidden weaknesses. In this paper we show how it creates asset bubbles and exacerbate their negative collateral consequences once they burst. It does the former by allowing banks to adopt generous valuations in up-markets that increase their lending capacity. It does the latter …

Microfinance Regulation: Interest Rate Caps And Concept Of Usury, Gray L. Skinner, William H. Payne

Gray L Skinner

I. Between Scylla and Charybdis: The balancing act of lending to the poor (Abstract)

Over the past two decades, microfinance has grown rapidly, reaching markets around the world and garnering the attention of policy makers and the media. Microfinance is the practice of offering small-scale banking services to communities in developing nations to improve the client's productivity and quality of life. The microfinance industry has attracted investors and practitioners who wish to unlock the profit potential of new markets while also achieving a philanthropic goal. As microfinance has grown, however, so has the need for legal regulation. Experts and practitioners …

Rethinking Preventive Measures For Money Laundering And Terrorism Financing, Richard K. Gordon

Richard K Gordon

Preventive measures for money laundering and terrorism financing are among the most widely accepted and observed global standards. However, there is substantial evidence that they do not work well. A main reason is that private sector parties, mostly financial institutions but including few others, are tasked with duties for which they are ill suited, while too little is required of the public sector . While they are required to monitor client transactions and reporting those that raise suspicion of money laundering or terrorism financing, they do not have sufficient expertise or data access to do so. Also, as suggested by …

• The Credit Crisis And Subprime Litigation: How Fraud Without Motive ‘Makes Little Economic Sense’, Peter Hamner

Peter Hamner

The recent collapse of the financial markets spurred numerous lawsuits seeking a faulty party. Many plaintiffs argue that market participants committed securities fraud. They claim that deficient subprime loans caused the financial crisis. These risky loans were allegedly originated by banks to be sold off to third parties. The subprime loans were securitized and spread throughout the financial markets. The risk these loans presented was allegedly not disclosed to the buyers of the loans and securities on the loans. As these deficient loans and securities began to default the financial markets came to a halt. This article argues that securities …