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The False Promise Of Risk-Reducing Incentive Pay: Evidence From Executive Pensions And Deferred Compensation, Kelli A. Alces, Brian D. Galle Oct 2012

The False Promise Of Risk-Reducing Incentive Pay: Evidence From Executive Pensions And Deferred Compensation, Kelli A. Alces, Brian D. Galle

Boston College Law School Faculty Papers

The average publicly-traded firm pays its CEO millions of dollars in deferred compensation and defined-benefit pension commitments. Scholars debate whether firms use these payments to efficiently align managerial interests with those of creditors, or whether instead they represent “hidden” forms of rent extraction. Yet others recommend these forms of debt-like incentive compensation, sometimes called “inside debt,” as a way of controlling risk-taking in systemically important financial institutions.

We argue instead that inside debt is unlikely to be efficient in either setting. Inside debt is costlier and more complex than other tools for managing risk, such as covenants or simply cutting ...


The Consumer Financial Protection Bureau: Financial Regulation For The 21st Century, Patricia A. Mccoy, Leonard Kennedy, Ethan Bernstein Jul 2012

The Consumer Financial Protection Bureau: Financial Regulation For The 21st Century, Patricia A. Mccoy, Leonard Kennedy, Ethan Bernstein

Boston College Law School Faculty Papers

After existing regulatory systems failed to prevent the recent financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, a sweeping reform designed to alleviate the crisis and prevent its recurrence. Out of this Act, the Consumer Financial Protection Bureau was born. This new agency is charged with making markets for consumer financial products and services work for Americans, a task that was previously spread out among seven different federal agencies with varying priorities. This Article describes, with a series of concrete case studies, four key principles that have guided the Bureau as it strives to fulfill ...


Defining Our Terms Carefully And In Context: Thoughts On Reading (And In One Case, Rereading) Three Books, Cynthia C. Lichtenstein May 2012

Defining Our Terms Carefully And In Context: Thoughts On Reading (And In One Case, Rereading) Three Books, Cynthia C. Lichtenstein

Boston College Law School Faculty Papers

In preparing to write this paper, I read again Walter Bagehot’s Lombard Street: A Description of the Money Market , Perry Mehrling’s The New Lombard Street: How the Fed Became the Dealer of Last Resort and John Authers’ The Fearful Rise of Markets: Global Bubbles, Synchronized Meltdowns, and How to Prevent Them in the Future. . Bagehot, of course, was the Governor of the Bank of England when he wrote what Mehrling calls his “magisterial” treatise in 1873 on how a central bank must react to a financial crisis. Mehrling is an economist and an economic historian. Authers is a ...


Federal Preemption And Consumer Financial Protection: Past And Future, Patricia A. Mccoy, Kathleen C. Engel Mar 2012

Federal Preemption And Consumer Financial Protection: Past And Future, Patricia A. Mccoy, Kathleen C. Engel

Boston College Law School Faculty Papers

Starting in 1995 and throughout the subprime boom during the next decade, Congress failed to take action to curb predatory mortgage lending. Many states and cities filled the void by passing anti-predatory lending laws of their own. Lenders, worried about potential liability, quickly organized a full-scale attack on the state and local initiatives. Their most potent strategy lay in challenging the laws and ordinances under federal preemption rules for national banks and federal savings associations that precluded states from enforcing their anti-predatory lending laws.

The Dodd-Frank Act curtailed the preemption rules by establishing that state consumer financial laws can only ...


Public Engagement In Rulemaking: The Consumer Financial Protection Bureau’S New Approach, Patricia A. Mccoy Jan 2012

Public Engagement In Rulemaking: The Consumer Financial Protection Bureau’S New Approach, Patricia A. Mccoy

Boston College Law School Faculty Papers

No abstract provided.