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Full-Text Articles in Law
Interest Rates, Venture Capital, And Financial Stability, Hilary J. Allen
Interest Rates, Venture Capital, And Financial Stability, Hilary J. Allen
Articles in Law Reviews & Other Academic Journals
Following several prominent bank failures and as central banks continue to tighten interest rates to fight inflation, there is increasing interest in the relationship between monetary policy and financial stability. This Article illuminates one path through which the prolonged period of low interest rates from 2009-2021 has impacted financial stability: it traces how yield-seeking behavior in the wake of the Global Financial Crisis and Covid pandemic led to a bubble in the venture capital industry, which in turn spawned a crypto bubble as well as a run on the VC-favored Silicon Valley Bank. This Article uses this narrative to illustrate …
Bankruptcy For Banks: A Tribute (And Little Plea) To Jay Westbrook, David A. Skeel Jr.
Bankruptcy For Banks: A Tribute (And Little Plea) To Jay Westbrook, David A. Skeel Jr.
All Faculty Scholarship
In this brief essay, to be included in a book celebrating the work of Jay Westbrook, I begin by surveying Jay’s wide-ranging contributions to bankruptcy scholarship. Jay’s functional analysis has had a profound effect on scholars’ understanding of key issues in domestic bankruptcy law, and Jay has been the leading scholarly figure on cross-border insolvency. After surveying Jay’s influence, I turn to the topic at hand: a proposed reform that would facilitate the use of bankruptcy to resolve the financial distress of large financial institutions. Jay has been a strong critic of this legislation, arguing that financial institutions need to …
Remutualization, Erik F. Gerding
Remutualization, Erik F. Gerding
Publications
Policymakers need to rediscover the organizational form of business entity as a tool of financial regulation. Recent and classic scholarship has produced evidence that financial institutions organized as alternative entity forms – including investment bank partnerships and banks and insurance companies organized as mutual or cooperatives – tend to take less risk, exploit customers/consumer less, or commit less misconduct compared to counterparts organized as investor-owned corporations. This article builds off the work of Hill and Painter on investment banks organized as partnerships, Hansmann on the history and economics of banks and insurance companies organized as mutuals and cooperatives, and other …
Should Issuers Be On The Hook For Laddering? An Empirical Analysis Of The Ipo Market Manipulation Litigation, Adam C. Pritchard, Stephen J. Choi
Should Issuers Be On The Hook For Laddering? An Empirical Analysis Of The Ipo Market Manipulation Litigation, Adam C. Pritchard, Stephen J. Choi
Articles
On December 6, 2000, the Wall Street Journal ran a front-page story exposing abuses in the market for initial public offerings (IPOs). The story revealed "tie-in" agreements between investment banks and initial investors seeking to participate in "hot" offerings. Under those agreements, initial investors would commit to buy additional shares of the offering company's stock in secondary market trading in return for allocations of shares in the IPO. As the Wall Street Journal related, those "[c]ommitments to buy in the after-market lock in demand for additional stock at levels above the IPO price. As such, they provide the rocket fuel …
The New Community Reinvestment Act Regulations: An Attempt To Implement Performance-Based Standards, Richard D. Marsico
The New Community Reinvestment Act Regulations: An Attempt To Implement Performance-Based Standards, Richard D. Marsico
Articles & Chapters
On May 4, 1995, the federal banking regulatory agencies published new Community Reinvestment Act (CRA) regulations.' This culminated a process that began nearly two years earlier, in July 1993, when President Clinton called on the agencies to reform the CRA enforcement regime. The goal was to institute a regulatory scheme that emphasized lending performance over process, that was more objective and less subject to arbitrary interpretation, and that reduced unnecessary paperwork.2 With this presidential mandate, the agencies commenced a 21-month odyssey that included seven hearings around the country with more than 250 witnesses, two sets of proposed revisions to the …
Free Speech And Corporate Freedom: A Comment On First National Bank Of Boston V. Bellotti, Carl E. Schneider
Free Speech And Corporate Freedom: A Comment On First National Bank Of Boston V. Bellotti, Carl E. Schneider
Articles
The corporation was born in chains but is everywhere free. That freedom was recently affirmed by the United States Supreme Court in First National Bank of Boston v. Bellotti. In Bellotti, the Court overturned a Massachusetts criminal statute forbidding banks and business corporations to make expenditures intended to influence referenda concerning issues not "materially affecting" the corporation's "property, business, or assets." In doing so, the Court confirmed its discovery that commercial speech is not unprotected by the first amendment and announced a novel doctrine that corporate speech is not unprotected by the first amendment. Although several years have …