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Full-Text Articles in Law
Governing Systemic Risk: Towards A Governance Structure For Derivatives Clearhouses, Sean J. Griffith
Governing Systemic Risk: Towards A Governance Structure For Derivatives Clearhouses, Sean J. Griffith
Faculty Scholarship
Derivatives transactions create systemic risk by threatening to spread the consequences of default throughout the financial system. Responding to the manifestations of systemic risk exhibited in the financial crisis, policy-makers have sought to solve the problem by requiring as many derivatives transactions as possible to be “cleared” (essentially guaranteed) by a clearinghouse. The clearinghouse will centralize and, through the creation of reserve accounts, seek to contain systemic risk by preventing the consequences of default from spreading. This centralization of risk makes the clearinghouse the new locus of systemic risk, and the question of systemic risk management thus becomes a question …
Reforming Derivative Taxation, Alex Raskolnikov
Reforming Derivative Taxation, Alex Raskolnikov
Faculty Scholarship
This brief essay outlines three benchmarks for evaluating alternative ways of taxing capital income, summarizes anticipatory, retroactive, and accrual-based proposals for reforming the taxation of derivatives, and offers guidelines for evaluating more limited reforms. It is intended as an introduction to key concepts, tensions, and ideas for reforming the taxation of financial instruments.
The Extraterritorial Provisions Of The Dodd-Frank Act Protects U.S. Taxpayers From Worldwide Bailouts, Michael Greenberger
The Extraterritorial Provisions Of The Dodd-Frank Act Protects U.S. Taxpayers From Worldwide Bailouts, Michael Greenberger
Faculty Scholarship
The significant extraterritorial scope of the derivatives regulation within the Dodd-Frank Wall Street Reform and Consumer Protection Act promises to foster rigorous international standards for financial regulation that will restore transparency and stability to the global derivatives market. At present, that market exceeds $700 trillion notional value, or over ten times the world GDP. Despite opposition from Wall Street to the present extraterritorial application of almost all of Dodd-Frank’s derivatives regulation, the plain language of the statute requires implementing that regulation on an appropriate extraterritorial basis in order to protect U.S. taxpayers from bailing out financial institutions engaging in foreign …