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Articles 1 - 18 of 18
Full-Text Articles in Law
Resetting The Baseline Of Ownership: Takings And Investor Expectations After The Bailouts, Nestor M. Davidson
Resetting The Baseline Of Ownership: Takings And Investor Expectations After The Bailouts, Nestor M. Davidson
Faculty Scholarship
During the economic crisis that began in 2008, the federal government nationalized several of the nation’s most significant private companies as part of a broad effort to forestall a global depression. Shareholders in those companies later filed suit, alleging that the federal government in so doing—and in subsequent actions while in control of the firms—took their property without compensation in violation of the Fifth Amendment. To date, those claims have not succeeded. If these cases continue on their current trajectory, with courts rejecting arguments that the rescue of systematically important firms on the brink of collapse requires compensation for shareholders, …
Substituted Compliance And Systemic Risk: How To Make A Global Market In Derivatives Regulation, Sean J. Griffith
Substituted Compliance And Systemic Risk: How To Make A Global Market In Derivatives Regulation, Sean J. Griffith
Faculty Scholarship
The conventional wisdom is that the global financial crisis of 2007-2008 revealed faults in the ability of international financial regulation to contain the problem of systemic risk. Further conventional wisdom suggests that the failure to regulate comple
Clearinghouses As Liquidity Partitioning, Richard Squire
Clearinghouses As Liquidity Partitioning, Richard Squire
Faculty Scholarship
To reduce the risk of another financial crisis, the Dodd-Frank Act requires that trading in certain derivatives be backed by clearinghouses. Critics mount two main objections: a clearinghouse shifts risk instead of reducing it; and a clearinghouse could fail, requiring a bailout. This Article’s observation that clearinghouses engage in liquidity partitioning answers both. Liquidity partitioning means that when one of its member firms becomes bankrupt, a clearinghouse keeps a portion of the firm’s most liquid assets, and a matching portion of its short-term debt, out of the bankruptcy estate. The clearinghouse then applies the first toward immediate repayment of the …
Whose Trojan Horse? The Dynamics Of Resistance Against Ifrs, Martin Gelter, Zehra Kavame Eroglu
Whose Trojan Horse? The Dynamics Of Resistance Against Ifrs, Martin Gelter, Zehra Kavame Eroglu
Faculty Scholarship
The introduction of International Financial Reporting Standards (“IFRS”) has been debated in the United States since at least the accounting scandals of the early 2000s. While publicly traded firms around the world are increasingly switching to IFRS, often because they are required to do so by law or by their stock exchange, the Securities Exchange Com-mission (“SEC”) seems to have become more reticent in recent years. Only foreign issuers have been permitted to use IFRS in the United States since 2007. By contrast, the EU has mandated the use of IFRS in the consolidated financial statements of publicly traded firms …
The Attorney-Client Privilege – Selective Compulsion, Selective Waiver And Selective Disclosure: Is Bank Regulation Exceptional?, Bruce A. Green
The Attorney-Client Privilege – Selective Compulsion, Selective Waiver And Selective Disclosure: Is Bank Regulation Exceptional?, Bruce A. Green
Faculty Scholarship
This essay examines three ways in which bank regulation has spawned significant exceptions to the ordinary judicial and administrative understanding of the attorney-client privilege. First, federal banking agencies assert that they have the legal authority selectively to compel banks and other financial institutions they supervise to disclose attorney-client privileged information. Second, when banks disclose privileged material to bank regulators, even if voluntarily, banks retain the privilege with respect to third parties pursuant to specific federal statutory authority. Third, under agency policy, once bank regulators obtain privileged information from a bank, whether through compulsion or voluntarily, the regulators reserve the right …
Accountability And The Bureau Of Consumer Financial Protection, Susan Block-Lieb
Accountability And The Bureau Of Consumer Financial Protection, Susan Block-Lieb
Faculty Scholarship
Some industry and political actors oppose the Consumer Financial Protection Bureau (CFPB) on the grounds that its institutional design ensures its lack of accountability. Specifically, opponents point to the CFPB’s regulatory and financial independence and to the fact that a single director heads the Bureau rather than a bipartisan panel of commissioners. But to focus on the Bureau’s financial independence and single director misses the distinctive political deal struck when Congress created the CFPB. The CFPB has been uniquely and intentionally structured to insulate it not only from interest group influence and executive interference, but also from congressional control, while …
Shareholder Opportunism In A World Of Risky Debt , Richard Squire
Shareholder Opportunism In A World Of Risky Debt , Richard Squire
Faculty Scholarship
Modern finance is increasingly dominated by derivatives and similar contracts that create contingent debts, which become payable only upon the occurrence of an uncertain future event. This Article identifies a pervasive opportunism hazard created by contingent debt that lawmakers and scholars have overlooked. If liability on a firm's contingent debt is especially likely to be triggered when the firm is insolvent, the contract that creates the debt transfers wealth from the firm's creditors to its shareholders. A firm therefore has incentive to engage in correlation-seeking - that is, to incur contingent debts that correlate, or that through asset purchases can …
Is There A Dual Banking System , Carl Felsenfeld, Genci Bilali
Is There A Dual Banking System , Carl Felsenfeld, Genci Bilali
Faculty Scholarship
There is a fierce controversy being waged today about the status of the historic dual banking system in American law. National banks (banks chartered by the national government) derive their powers from federal law. States, on the other hand, assert that they should be able to control certain aspects of national bank operations such as consumer protection written as state law. While the national banks acknowledge that states do have certain areas where they may control national bank activities-much contract law, for example, which is essentially state law-the national banks also assert a high level of authority-preemption-over the states where …
Check Clearing For The 21st Century Act - A Wrong Turn In The Road To Improvement Of The U.S. Payments System, The , Carl Felsenfeld, Genci Bilali
Check Clearing For The 21st Century Act - A Wrong Turn In The Road To Improvement Of The U.S. Payments System, The , Carl Felsenfeld, Genci Bilali
Faculty Scholarship
The Check Clearing for the 21st Century Act' (Check 21 Act) was introduced to Congress by the Federal Reserve System, enacted by Congress, signed by the President on October 28, 2003, and became effective one year later, on October 28, 2004. It makes a modest change in the check-clearing system designed to speed the movement of checks from the depositary to the paying bank. It is anticipated that it will eventually lead to what is called "electronic presentment," a process that may make the clearing of checks almost as swift as to- day's electronic payment systems. This Article gives the …
Role Of The Bank For International Settlements In Shaping The World Financial System, The , Carl Felsenfeld, Genci Bilali
Role Of The Bank For International Settlements In Shaping The World Financial System, The , Carl Felsenfeld, Genci Bilali
Faculty Scholarship
The Bank for International Settlements ("BIS") was set up in Basel, Switzerland in 1923 to handle remaining financial issues from World War II largely having to do with German reparation payments. It was the first of the semi-public international banks. Over the years its functions have changed and, largely since the late 1970's, it has served as the situs for the world's central banks and financial regulators to pool ideas and deal with international financial issues. A group of committees, com- posed largely of representatives of central bankers, now meets at BIS and has been issuing memoranda and drafts of …
Vultures Or Vanguards: The Role Of Litigation In Sovereign Debt Restructuring Conference On Sovereign Debt Restructuring: The View From The Legal Academy, Jill E. Fisch, Caroline M. Gentile
Vultures Or Vanguards: The Role Of Litigation In Sovereign Debt Restructuring Conference On Sovereign Debt Restructuring: The View From The Legal Academy, Jill E. Fisch, Caroline M. Gentile
Faculty Scholarship
The market for sovereign debt differs from the market for corporate debt in several important ways including the risk of opportunistic default by sovereign debtors, the importance of political pressures, and the presence of international development organizations. Moreover, countries are subject to neither liquidation nor standardized processes of debt reorganization. Instead, negotiations between a sovereign debtor and its creditors lead to a voluntary restructuring of the sovereign's debt. One of the greatest difficulties in restructuring claims against sovereign debtors is balancing the interests of the majority of the creditors with those of minority creditors. Holdout creditors serve as a check …
Speculation On The Future Of The Bank For International Settlements, A , Carl Felsenfeld, Genci Bilali
Speculation On The Future Of The Bank For International Settlements, A , Carl Felsenfeld, Genci Bilali
Faculty Scholarship
Financial crises around the globe place countries at risk. Not only do less developed countries like Mexico and Argentina tremble from the inadequacies of their banking systems, but large and developed economies such as Japan suffer similar apprehension. As a result, national financial authorities find themselves looking for a type of international financial entity that can coordinate the efforts of these authorities in maintaining safety and soundness in their respective financial and banking sectors. This being the case, financial markets need the assistance of an international institution that can regulate national banking systems and, in return, can avoid any future …
Business Divisions From The Perspective Of The U.S. Banking System , Carl Felsenfeld, Genci Bilali
Business Divisions From The Perspective Of The U.S. Banking System , Carl Felsenfeld, Genci Bilali
Faculty Scholarship
The Bank Holding Company Act of 1956 ("Act"),' as amended, most recently in 1999 by the Gramm-Leach-Bliley Act ("GLB") divides all economic activity into five groups. These groups are: 1) banking, 2) activities closely related to and a proper incident to banking; 3) activities of a financial nature; 4) activities complimentary to those of a financial nature; and 5) activities not of a financial nature. This article will explore these five groups of activities separately. The policies behind the divisions will be analyzed and questioned whether they serve the policies behind the Act. This article will also question whether the …
Bank Holding Company Act: Has It Lived Its Life, The , Carl Felsenfeld
Bank Holding Company Act: Has It Lived Its Life, The , Carl Felsenfeld
Faculty Scholarship
The Bank Holding Company Act of 1956 (BHCA) "regulates the acquisition of state and national banks by bank holding companies." The BHCA also regulates the nonbanking activities of bank holding companies and their nonbank subsidiaries. The BHCA was enacted and remains on the books for two fundamental reasons: 1) to prevent undue concentration in banking; and 2) to avoid the mixing of banking with other businesses unrelated to banking (generally called "commerce"). Both of these purposes have been or are being discredited, and it is time to ask whether the BHCA should be repealed. On several levels, banking is combined …
The Privacy Obstacle Course: Hurding Barriers To Transnational Financial Services, Joel R. Reidenberg
The Privacy Obstacle Course: Hurding Barriers To Transnational Financial Services, Joel R. Reidenberg
Faculty Scholarship
This article addresses the challenge to transnational financial services resulting from national regulation of information processing. National laws around the world seek to define fair information practices for the private sector and contain prohibitions on data transfers to foreign destinations that lack sufficient privacy protection. The effect of these laws for the financial services industry is significant because financial services depend on personal information. The article argues that the international attempts to harmonize information practice standards and the national efforts to regulate information processing encourage divergence of national standards for financial services. It argues that regulatory flexibility and customization is …
Strange Bedfellows For Electronic Funds Transfers: Proposed Article 4a Of The Uniform Commercial Code And The Uncitral Model Law Symposium: Revised U.C.C. Articles 3 &(And) 4 And New Article 4a, Carl Felsenfeld
Faculty Scholarship
Two pieces of proposed legislation that will affect the same subject matter are proceeding down parallel tracks. If all goes as planned, the tracks will at some time turn inward and there may be a collision. Each piece has as its core concern the subject of electronic funds transfers ("EFTs"), the modern device that has overtaken checks as the principal form of money transfer.' Basically, however, before the promulgation of Article 4A there was no legislation, either in the United States or abroad, that governed EFTs in the way that Articles 3 and 4 of the Uniform Commercial Code ("U.C.C.") …
Double Jeopardy Of Corporate Profits, The , Constantine N. Katsoris
Double Jeopardy Of Corporate Profits, The , Constantine N. Katsoris
Faculty Scholarship
The more one reads about our economy, the more one is baffled and alarmed. Permanent solutions to economic problems are elusive. Treating one financial malaise often aggravates another sector of the economy, necessitating a delicate balancing of conflicting interests. Furthermore, the problems are complicated by the constant influence of foreign forces. Nevertheless, most economists agree that any solution will require enormous funding. Unfortunately, the public has little, if any, confidence in our tax system. Indeed, some tax laws and proposals have been referred to as "obscene" and a "disgrace to the human race." Few quarrel with the aptness of such …
Competing State And Federal Roles In Consumer Credit Law , Carl Felsenfeld
Competing State And Federal Roles In Consumer Credit Law , Carl Felsenfeld
Faculty Scholarship
An important problem confronting those in the consumer credit industry is the absence of a cohesive body of law. This impairs creditors of all types and also results in unequal treatment of consumers. In a comprehensive study Mfr. Felsenfeld analyzes the evolution from purely state regulation of consumer credit to a combination of state and federal control. The author suggests that, despite certain merits of local regulation, the consumer credit area may well be preempted by future federal legislation.