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University of Michigan Law School

Banking and Finance Law

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Full-Text Articles in Law

Chinese Resource-For-Infrastructure (Rfi) Investments In Sub-Saharan Africa And The Future Of The "Rules-Based" Framework For Sovereign Finance: The Sicomines Case Study, Jingwei Xu Aug 2020

Chinese Resource-For-Infrastructure (Rfi) Investments In Sub-Saharan Africa And The Future Of The "Rules-Based" Framework For Sovereign Finance: The Sicomines Case Study, Jingwei Xu

Michigan Journal of International Law

China has emerged as sub-Saharan Africa’s largest development financier over the past two decades. While commentators have observed novel, sui generis transactional structures in China’s financing arrangements, legal analysis of those contractual forms and their relationships to incumbent international economic governance regimes remains scant. This note addresses those scholarly lacunae, taking as its case study the 2008 Sicomines Agreement—a multi-billion USD investment financing agreement between the Democratic Republic of the Congo and various Chinese corporate entities that merges infrastructure investment with a mineral extraction joint-venture project. It demonstrates that the Sicomines Agreement selectively draws on and integrates ...


Gatekeeping The Gatekeepers: The Need For A Licensing Requirement For Crowdfunding Portals In The Wake Of The Dreamfunded Decision, Nick Worden Jun 2020

Gatekeeping The Gatekeepers: The Need For A Licensing Requirement For Crowdfunding Portals In The Wake Of The Dreamfunded Decision, Nick Worden

Michigan Business & Entrepreneurial Law Review

Most people are familiar with crowdfunding sites such as Kickstarter and GoFundMe—sites that allow users to part with their money in exchange for products or donate their capital to organizations they believe in. However, these sites have one trait in common: they do not offer contributors equity or a promise for future profits. For a long time, selling equity meant complying with the costly requirements of federal securities laws, which was cost-prohibitive for many small businesses; it was illegal for businesses to offer equity over a site in the way businesses on Kickstarter offered products. The Jumpstart Our Business ...


Front Matter, Michigan Business & Entrepreneurial Law Review Jun 2020

Front Matter, Michigan Business & Entrepreneurial Law Review

Michigan Business & Entrepreneurial Law Review

Front matter for Volume 9, Issue 2 of the Michigan Business & Entrepreneurial Law Review.


From Inactivity To Full Enforcement: The Implementation Of The "Do No Harm" Approach In Initial Coin Offerings, Marco Dell'erba May 2020

From Inactivity To Full Enforcement: The Implementation Of The "Do No Harm" Approach In Initial Coin Offerings, Marco Dell'erba

Michigan Technology Law Review

This Article analyzes the way the Securities and Exchange Commission (“SEC”) has enforced securities laws with regard to Initial Coin Offerings (“ICOs”). In a speech held in 2016, the U.S. Commodities Futures Trading Commission (“CFTC”) Chairman Christopher Giancarlo emphasized the similarities between the advent of the blockchain technology and the Internet era. He offered the “do no harm” approach as the best way to regulate blockchain technology. The Clinton administration implemented the “do no harm” approach at the beginning of the Internet Era in the 1990s when regulators sought to support technological innovations without stifling them with burdensome rules ...


Coin, Currency, And Constitution: Reconsidering The National Bank Precedent, David S. Schwartz May 2020

Coin, Currency, And Constitution: Reconsidering The National Bank Precedent, David S. Schwartz

Michigan Law Review

Review of Eric Lomazoff's Reconstructing the National Bank Controversy: Politics and Law in the Early American Republic.


Libra: A Concentrate Of "Blockchain Antitrust", Thibault Schrepel Apr 2020

Libra: A Concentrate Of "Blockchain Antitrust", Thibault Schrepel

Michigan Law Review Online

Blockchains promise to decentralize the economy, bypassing trusts in favor of decentralized communities. The World Economic Forum predicts that 10 percent of the global gross domestic product will be stored on block-chain by 2027. Gartner further prophesizes that blockchain will create $3.1 trillion worth of business value by 2030. Even if that prediction turns out to be too optimistic, blockchain’s legal implications cannot be neglected.


The Siren Song Of Litigation Funding, J.B. Heaton Apr 2020

The Siren Song Of Litigation Funding, J.B. Heaton

Michigan Business & Entrepreneurial Law Review

For an investor, litigation funding is too tempting to resist. Litigation funding promises that most elusive of investment returns: those uncorrelated with an investor’s other investment returns. Litigation funding also invests in a world that seems fraught with possible pricing inefficiencies. It seems plausible—even likely—that a team of smart lawyer-underwriters can identify high-value litigation investments to generate superior returns for litigation funding investors. But more than a decade of experience suggests the promise of litigation funding is a siren song. The promise draws investors into the water, but the payoffs may be meager and rare. While litigation ...


The Increasing Reliance On Educational Loans By University Of Michigan Law School Graduates, David L. Chambers Aug 2019

The Increasing Reliance On Educational Loans By University Of Michigan Law School Graduates, David L. Chambers

Bibliography of Research Using UMLS Alumni Survey Data

Among graduates of the University of Michigan Law School in the classes of 1970 through 1979, about half borrowed to pay for their college or legal education. By the early 1980s the portion who borrowed had risen to about 80 percent and has remained at that level through the classes of early twenty-first century. Even greater growth has occurred in the average debt of those who incurred debt. In actual dollars, average debts among those with debt have increased twenty-fold from the 1970s to the early 2000s. Even in CPI-adjusted dollars, average debts have tripled. By the classes of 2000-2001 ...


Should The United States Adopt Crs?, Noam Noked Jun 2019

Should The United States Adopt Crs?, Noam Noked

Michigan Law Review Online

The United States' one-sided approach to tax transparency might lead to an unprecedented clash with the European Union (EU) in the near future. In light of the EU's deadline for the United States, the U.S. Treasury and Congress should urgently engage in a discussion on whether the United States should adopt the Common Reporting Standard (CRS) for automatic exchange of financial account information. A recent report from the U.S. Government Accountability Office considered this issue and did not recommend adopting CRS. This Essay discusses the contents of the report, as well as important considerations that were left ...


Grants, Nicholson Price Ii May 2019

Grants, Nicholson Price Ii

Articles

Innovation is a primary source of economic growth and is accordingly the target of substantial academic and government attention. Grants are a key tool in the government’s arsenal to promote innovation, but legal academic studies of that arsenal have given them short shrift. Although patents, prizes, and regulator-enforced exclusivity are each the subject of substantial literature, grants are typically addressed briefly, if at all. According to the conventional story, grants may be the only feasible tool to drive basic research, as opposed to applied research, but they are a blunt tool for that task. Three critiques of grants underlie ...


Why Markets? Welfare, Autonomy, And The Just Society, Hanoch Dagan Apr 2019

Why Markets? Welfare, Autonomy, And The Just Society, Hanoch Dagan

Michigan Law Review

Review of Eric A. Posner's Radical Markets: Uprooting Capitalism and Democracy for a Just Society.


Crisis-Driven Tax Law: The Case Of Section 382, Albert H. Choi, Quinn Curtis, Andrew T. Hayashi Jan 2019

Crisis-Driven Tax Law: The Case Of Section 382, Albert H. Choi, Quinn Curtis, Andrew T. Hayashi

Articles

At the peak of the 2008 financial crisis, the Internal Revenue Service (IRS) issued Notice 2008–83 (the Notice), administrative guidance that limited Internal Revenue Code (the Code) section 382, an important tax rule designed to discourage tax-motivated acquisitions. Although styled as a mere interpretation of existing law, the Notice has been widely viewed as an improper exercise of the IRS’s authority that undermined its legitimacy. But did the Notice work? There were many extraordinary interventions during the financial crisis that raised questions about eroding the rule of law and the long-term destabilizing effects of bail­outs. In a ...


"The Essential Characteristic": Enumerated Powers And The Bank Of The United States, Richard Primus Dec 2018

"The Essential Characteristic": Enumerated Powers And The Bank Of The United States, Richard Primus

Michigan Law Review

The idea that Congress can legislate only on the basis of its enumerated powers is an orthodox proposition of constitutional law, one that is generally supposed to have been recognized as essential ever since the Founding. Conventional understandings of several episodes in constitutional history reinforce this proposition. But the reality of many of those events is more complicated. Consider the 1791 debate over creating the Bank of the United States, in which Madison famously argued against the Bank on enumerated-powers grounds. The conventional memory of the Bank episode reinforces the sense that the orthodox view of enumerated powers has been ...


Remembering Financial Crises: The Risk Implications Of The Rise Of Institutional Investors In Project Finance, David J. Park Nov 2018

Remembering Financial Crises: The Risk Implications Of The Rise Of Institutional Investors In Project Finance, David J. Park

Michigan Law Review

Barely a decade ago, a cascading sequence of market failures threatened to topple the global financial system. Public responses to the recent Financial Crisis were immediate and drastic to resuscitate the global economy while attempting to make the markets safer. Many financial services sectors have since recovered to pre-crisis levels. One such industry is project finance, which comprises various financing arrangements often used to fund long-term infrastructure or industrial projects. Curiously, significant post-crisis banking regulations and other global credit enhancement initiatives are pushing banks out of project finance and giving rise to institutional investors. This Comment argues that animated institutional ...


Front Matter, Michigan Business & Entrepreneurial Law Review Oct 2018

Front Matter, Michigan Business & Entrepreneurial Law Review

Michigan Business & Entrepreneurial Law Review

Front matter for Volume 8, Issue 1 of the Michigan Business & Entrepreneurial Law Review.


Assessing The Evolution Of Cryptocurrency: Demand Factors, Latent Value, And Regulatory Developments, Ryan Clements Oct 2018

Assessing The Evolution Of Cryptocurrency: Demand Factors, Latent Value, And Regulatory Developments, Ryan Clements

Michigan Business & Entrepreneurial Law Review

The purpose of this Comment is to analyze the roots of this fervor— including that which drove Bitcoin’s initial demand surge—and investigate whether cryptocurrency can survive a market bubble that experienced a significant correction in 2018.


The Rise-And-Fall Of Leading International Financial Centers: Factors And Application, Adam Church May 2018

The Rise-And-Fall Of Leading International Financial Centers: Factors And Application, Adam Church

Michigan Business & Entrepreneurial Law Review

This Note will look at the role of four broad factors that correspond with the rise-and-fall cycles among leading international financial centers. The four factors are: trust in a financial center’s abilities; the central banking and monetary policy systems of the center’s home nation; the home nation’s landscape of financial policy and regulation; and the overall stability of the financial center itself. First, this Note will undertake a broad historical survey of the shifts in prominence from Amsterdam to London, from London to New York, and from New York back to London to define the scope of ...


Shock Therapy, Social Engineering, And Financial Discipline: What Does An Increasingly Financialized World Mean For Democratic Participation?, Layan Charara May 2018

Shock Therapy, Social Engineering, And Financial Discipline: What Does An Increasingly Financialized World Mean For Democratic Participation?, Layan Charara

Michigan Business & Entrepreneurial Law Review

Over the last several decades, the Bretton Woods Institutions have come to be drivers of policy in the realms of economic liberalization and development, exceeding their original mandates of fostering monetary cooperation and facilitating post-war reconstruction. The structural adjustment programs of the World Bank and the International Monetary Fund have engendered mixed results–delivering some countries from financial crises, while inciting riots and compounding state failure in others. Such varied experiences suggest there is some disconnect between the conditions to lending promulgated by these institutions and the realities on the ground. This Note will trace the evolution of high conditionality ...


Integrating Micro And Macro Policy Levers In Response To Financial Crises, Daniel A. Crane, Markus Kitzmuller, Graciela Miralles May 2018

Integrating Micro And Macro Policy Levers In Response To Financial Crises, Daniel A. Crane, Markus Kitzmuller, Graciela Miralles

Michigan Business & Entrepreneurial Law Review

The 2008–09 Global Financial Crisis originated from a poor incentive structure in the asset market derived from subprime mortgages. The ultimate bursting and unwinding of an asset bubble (here highly overvalued real estate prices woven into a complex multilayer network of securitization, so called collateralized debt obligations or CDOs) put enormous stress on the financial system, spreading through the global network economy and ultimately resulting in the worst economic crisis since the Great Depression. Economists today agree that the severe economic fallout can be largely attributed to the poor systemic performance of international financial markets. Global macroeconomic imbalances, as ...


Behavioral Finance Symposium Summary Paper, Michael S. Barr, Annabel Jouard, Andrew Norwich, Josh Wright, Katy Davis May 2018

Behavioral Finance Symposium Summary Paper, Michael S. Barr, Annabel Jouard, Andrew Norwich, Josh Wright, Katy Davis

Other Publications

On September 14-15, 2017, the University of Michigan’s Center on Finance, Law, and Policy and behavioral science research and design lab ideas42 brought together influential leaders from academia, government, nonprofits and the financial sector for a two-day symposium on behavioral finance. Behavioral finance is the study of how behavioral biases and tendencies affect financial decisions, and in turn how those impact financial markets.


The Commodification Of Cryptocurrency, Neil Tiwari Jan 2018

The Commodification Of Cryptocurrency, Neil Tiwari

Michigan Law Review

Cryptocurrencies are digital tokens built on blockchain technology. This allows for a product that is fully decentralized, with no need for a third-party intermediary like a government or financial institution. Cryptocurrency creators use initial coin offerings (ICOs) to raise capital to build their tokens. Cryptocurrency ICOs are problematic because they do not fit neatly within either of two traditional categories—securities or commodities. Each of these categories has their own regulatory agency: the SEC for securities and the CFTC for commodities. At first blush, ICOs seem to be a sale of securities subject to regulation by the SEC, but this ...


Evaluating Financial Integration And Cooperation In The Asean, Brendan Harvey Nov 2017

Evaluating Financial Integration And Cooperation In The Asean, Brendan Harvey

Michigan Business & Entrepreneurial Law Review

Financial integration is less pronounced in the ASEAN than other mea-sures of economic integration. This is particularly apparent when com-pared against other regions that have undergone similar integrative efforts, such as the European Union. Cross-border trade flows, foreign-direct in-vestment, and investment in capital goods outstrip other investment flows. Regional institutional and legal structures governing these investment flows, while limited, present marked achievements towards creating an ASEAN financial community. The gap persists despite suggestions that the Asian Financial Crisis and the Global Financial Crisis (or the North Atlan-tic Financial Crisis from the Asian and Stiglitz perspective) would acceler-ate financial regionalism as ...


Front Matter, Michigan Business & Entrepreneurial Law Review May 2017

Front Matter, Michigan Business & Entrepreneurial Law Review

Michigan Business & Entrepreneurial Law Review

No abstract provided.


Compensation For Expropriations In A World Of Investment Treaties: Beyond The Lawful/Unlawful Distinction, Steven Ratner Apr 2017

Compensation For Expropriations In A World Of Investment Treaties: Beyond The Lawful/Unlawful Distinction, Steven Ratner

Law & Economics Working Papers

When a state expropriates a foreign investment in violation of a bilateral or other treaty on investment protection and a foreign investor sues, where should a tribunal look for the standard of compensation -- to the amount specified in the treaty, to an external standard for violations of internationally law generally, or elsewhere? Investor-state tribunals have offered wildly different answers to this question, trapped in a paradigm set by the Permanent Court of International Justice ninety years ago that distinguishes between so-called lawful and unlawful expropriations. This article evaluates and criticizes the caselaw of tribunals and proposes a new framework for ...


Finance And Growth: The Legal And Regulatory Implications Of The Role Of The Public Equity Market In The United States, Ezra Wasserman Mitchell Apr 2017

Finance And Growth: The Legal And Regulatory Implications Of The Role Of The Public Equity Market In The United States, Ezra Wasserman Mitchell

Michigan Business & Entrepreneurial Law Review

The important study of the relationship between finance and economic growth has exploded over the past two decades. One of the most significant open questions is the role of the public equity market in stimulating growth and the channels it follows if it does. This paper examines that question from an economic, legal, and historical perspective, especially with regard to its regulatory and corporate governance implications. The US market is my focus.

In contrast to most studies, I follow both economic history and the actual flow of funds in addition to empirics and theory to conclude that the public equity ...


Bitcoin's Growing Pains: Intermediation And The Need For An Effective Loss Allocation Mechanism, Andrew Kang Apr 2017

Bitcoin's Growing Pains: Intermediation And The Need For An Effective Loss Allocation Mechanism, Andrew Kang

Michigan Business & Entrepreneurial Law Review

This paper examines a phenomenon largely overlooked in existing literature: as Bitcoin matures into a mainstream consumer payments system with the rise of intermediation and hosted wallet services, it is slowly transforming from a purely decentralized peer-to-peer currency into something that (ironically) more closely resembles the bank-intermediated payment systems of the past. This paper explains how this transformation creates complicated issues of loss allocation not anticipated by Bitcoin’s founder. Further, it argues for the need of an effective legal mechanism to efficiently and fairly allocate losses between intermediaries and users. The first section of this paper will explain how ...


Financial Reform: Making The System Safer And Fairer, Michael S. Barr Jan 2017

Financial Reform: Making The System Safer And Fairer, Michael S. Barr

Articles

In the fall of 2008, the financial crisis crushed the U.S. economy and plunged the country into the Great Recession. The crisis shuttered American businesses, cost millions of Americans their jobs, and wiped out home values and household savings. The macro effects hit hardest and were the longest lasting for those least able to bear the brunt of the crisis. It was devastating to middle-income families and perhaps even more so to low- and moderate-income households, who had little financial buffer (Barr 2012a). Financial stability, never robust for these families, dropped precipitously (Barr and Schaffa 2016). Both in the ...


Big Data In Finance, University Of Michigan Law School Oct 2016

Big Data In Finance, University Of Michigan Law School

Event Materials

Program for the Big Data in Finance conference.


Basel Iii And The Future Of Project Finance Funding, Tianze Ma Oct 2016

Basel Iii And The Future Of Project Finance Funding, Tianze Ma

Michigan Business & Entrepreneurial Law Review

This paper seeks to analyze the new requirements in the Basel III banking regulatory framework and explore their impact on commercial banks’ project finance portfolio. The paper begins with a general introduction of the Basel Accords, followed by an analysis of the changes in the Basel III requirements and their potential impact on project finance, in particular the effects of the liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR). The paper ends with a discussion of alternative sources of project finance funding that emerged as a result of the new regulatory regime.


Audience Participation: Crowdfunding Large Scale Theatrical Productions Through Regulation A+, Christopher Johnson Oct 2016

Audience Participation: Crowdfunding Large Scale Theatrical Productions Through Regulation A+, Christopher Johnson

Michigan Business & Entrepreneurial Law Review

Theatrical financing has been conducted in much the same way for the better part of a century. This method, however, has consistently provided only the shows with access to the deepest of pockets a path to Broadway. The advent of Internet-based crowdfunding provides producers access to a potential source of capital that was previously unavailable. Prior to the promulgation of the SEC regulations regarding Title IV of the JOBS Act, this capital could only be accessed through donation or reward based financing campaigns, but with the introduction of Regulation A+, there is finally a practical method for the widespread solicitation ...