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Articles 1 - 7 of 7

Full-Text Articles in Law

Why Financial Regulation Keeps Falling Short, Dan Awrey, Kathryn Judge Jan 2020

Why Financial Regulation Keeps Falling Short, Dan Awrey, Kathryn Judge

Faculty Scholarship

This article argues that there is a fundamental mismatch between the nature of finance and current approaches to financial regulation. Today’s financial system is a dynamic and complex ecosystem. For these and other reasons, policy makers and market actors regularly have only a fraction of the information that may be pertinent to decisions they are making. The processes governing financial regulation, however, implicitly assume a high degree of knowability, stability, and predictability. Through two case studies and other examples, this article examines how this mismatch undermines financial stability and other policy aims. This examination further reveals that the procedural ...


Inside Safe Assets, Anna Gelpern, Erik F. Gerding Sep 2016

Inside Safe Assets, Anna Gelpern, Erik F. Gerding

Georgetown Law Faculty Publications and Other Works

“Safe assets” is a catch-all term for financial contracts that market participants treat as if they were risk-free. These may include government debt, AAA corporate debt, bank debt, and asset-backed securities, among others. The International Monetary Fund estimated potential safe assets at more than $114 trillion worldwide in 2011, over seven times the U.S. economic output that year.

To treat any contract as if it were risk-free seems delusional after apparently super-safe public and private debt markets collapsed overnight. Nonetheless, financial crises have only raised the policy and academic profile of safe assets, invoked to explain global imbalances, shadow ...


Inside Safe Assets, Anna Gelpern, Erik F. Gerding Jan 2016

Inside Safe Assets, Anna Gelpern, Erik F. Gerding

Articles

“Safe assets” is a catch-all term to describe financial contracts that market participants treat as if they were risk-free. These may include government debt, bank deposits, and asset-backed securities, among others. The International Monetary Fund estimated potential safe assets at more than $114 trillion worldwide in 2011, more than seven times the U.S. economic output that year.

To treat any contract as if it were risk-free seems delusional after apparently super-safe public and private debt markets collapsed overnight. Nonetheless, safe asset supply and demand have been invoked to explain shadow banking, financial crises, and prolonged economic stagnation. The economic ...


The Road To Precautionary Review Of Financial Products, Hilary Allen Jul 2015

The Road To Precautionary Review Of Financial Products, Hilary Allen

Articles in Law Reviews & Other Academic Journals

Financial innovation introduces new and complex products into the financial system, providing market participants with more bespoke ways to manage their risk, return and liquidity. However, by increasing the complexity of the financial system, financial innovation also compromises financial stability. Faced with the rapid pace of financial innovation, regulators have two options. One is to seek to meet the complexity of the industry with complex regulation, in an arms race that under-resourced regulators are bound to lose. The less explored (and more controversial) path is for regulators to try to reduce the complexity of the financial system by limiting financial ...


Putting The 'Financial Stability' In Financial Stability Oversight Council, Hilary Allen Jan 2015

Putting The 'Financial Stability' In Financial Stability Oversight Council, Hilary Allen

Articles in Law Reviews & Other Academic Journals

For all the ink that has been spilled on the topic of financial regulation since the financial crisis of 2007-2008, there has been little examination of the competing normative goals of financial regulation. Should the financial system be treated as an end in itself such that the efficiency of that system is the primary goal? Or should financial regulation instead treat the financial system as a means to the end of broader economic growth? This Article argues for the latter approach, and stakes out the controversial normative position that financial stability, rather than efficiency, should be the paramount focus of ...


A Simpler Approach To Financial Reform, Morgan Ricks Jan 2013

A Simpler Approach To Financial Reform, Morgan Ricks

Vanderbilt Law School Faculty Publications

There is a growing consensus that new financial reform legislation may be in order. The Dodd-Frank Act of 2010, while well-intended, is now widely viewed to be at best insufficient, at worst a costly misfire. Members of Congress are considering new and different measures. Some have proposed substantially higher capital requirements for the largest financial firms; others favor an updated version of the old Glass-Steagall regime. This paper offers up a simpler approach, one that centers around the financial sector’s short-term funding. The simpler approach would be compatible with other financial stability reforms, but it is better understood as ...


The Confidence Game: Manipulation Of The Markets By Governmental Authorities, Caroline Bradley Jan 2009

The Confidence Game: Manipulation Of The Markets By Governmental Authorities, Caroline Bradley

Articles

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