Open Access. Powered by Scholars. Published by Universities.®

Law Commons

Open Access. Powered by Scholars. Published by Universities.®

Series

Columbia Law School

Columbia Law Review

Banking and Finance Law

Articles 1 - 8 of 8

Full-Text Articles in Law

The First Year: The Role Of A Modern Lender Of Last Resort, Kathryn Judge Jan 2016

The First Year: The Role Of A Modern Lender Of Last Resort, Kathryn Judge

Faculty Scholarship

Insufficient liquidity can trigger fire sales and wreak havoc on a financial system. To address these challenges, the Federal Reserve (the Fed) and other central banks have long had the authority to provide financial institutions liquidity when market-based sources run dry. Yet, liquidity injections sometimes fail to quell market dysfunction. When liquidity shortages persist, they are often symptoms of deeper problems plaguing the financial system.

This Essay shows that continually pumping new liquidity into a financial system in the midst of a persistent liquidity shortage may increase the fragility of the system and, on its own, is unlikely to resolve ...


Bank Resolution In The European Banking Union: A Transatlantic Perspective On What It Would Take, Jeffery N. Gordon, Wolf-Georg Ringe Jan 2015

Bank Resolution In The European Banking Union: A Transatlantic Perspective On What It Would Take, Jeffery N. Gordon, Wolf-Georg Ringe

Faculty Scholarship

The project of creating a Banking Union is designed to overcome the fatal link between sovereigns and their banks in the Eurozone. As part of this project, political agreement for a common supervision framework and a common resolution scheme has been reached with difficulty. However, the resolution framework is weak, underfunded and exhibits some serious flaws. Further, Member States' disagreements appear to rule out a federalized deposit insurance scheme, commonly regarded as the necessary third pillar of a successful Banking Union. This paper argues for an organizational and capital structure substitute for these two shortcomings that can minimize the systemic ...


Stock Unloading And Banker Incentives, Robert J. Jackson Jr. Jan 2012

Stock Unloading And Banker Incentives, Robert J. Jackson Jr.

Faculty Scholarship

Congress has directed federal regulators to oversee banker pay. For the first time, these regulators are now scrutinizing the incentives of risk-takers beyond the bank's top executives. Like most public company managers, these bankers are increasingly paid in stock rather than cash. The ostensible reason is that stock-based pay aligns manager and shareholder interests. But portfolio theory predicts that managers will diversify away, or "unload," stock-based pay unless they are restricted from doing so. One way to deter unloading may be to require managers to disclose it, as investors and colleagues will assume that managers are unloading because they ...


Civil Liability And Mandatory Disclosure, Merritt B. Fox Jan 2009

Civil Liability And Mandatory Disclosure, Merritt B. Fox

Faculty Scholarship

This Article explores the efficient design of civil liability for mandatory securities disclosure violations by established issuers. An issuer not publicly offering securities at the time of a violation should have no liability. Its annual filings should be signed by an external certifier – an investment bank or other well-capitalized entity with financial expertise. If the filing contains a material misstatement and the certifier fails to do due diligence, the certifier should face measured liability. Officers and directors should face similar liability, capped relative to their compensation but with no indemnification or insurance allowed. Damages should be payable to the issuer ...


Deconstructing Equity: Public Ownership, Agency Costs, And Complete Capital Markets, Ronald J. Gilson, Charles K. Whitehead Jan 2008

Deconstructing Equity: Public Ownership, Agency Costs, And Complete Capital Markets, Ronald J. Gilson, Charles K. Whitehead

Faculty Scholarship

The traditional law and finance focus on agency costs presumes that the premise that diversified public shareholders are the cheapest risk bearers is immutable. In this Essay, we raise the possibility that changes in the capital markets have called this premise into question, drawn into sharp relief by the recent private equity wave in which the size and range of public companies being taken private expanded signficantly. In brief, we argue that private owners, in increasingly complete markets, can transfer risk in discrete slices to counterparties who, in turn, can manage or otherwise diversify away those risks they choose to ...


Reputational Sanctions In China's Securities Market, Benjamin L. Liebman, Curtis J. Milhaupt Jan 2008

Reputational Sanctions In China's Securities Market, Benjamin L. Liebman, Curtis J. Milhaupt

Faculty Scholarship

Literature suggests two distinct paths to stock market development: an approach based on legal protections for investors, and an approach based on self-regulation of listed companies by stock exchanges. This Essay traces China's attempts to pursue both approaches, while focusing primarily on the role of the stock exchanges as regulators. Specifically, the Essay examines a fascinating but unstudied aspect of Chinese securities regulation – public criticism of listed companies by the Shanghai and Shenzhen exchanges. Based on both event study methodology and extensive interviews of market actors, we find that the public criticisms have significant effects on listed companies and ...


Liquidity Versus Control: The Institutional Investor As Corporate Monitor, John C. Coffee Jr. Jan 1991

Liquidity Versus Control: The Institutional Investor As Corporate Monitor, John C. Coffee Jr.

Faculty Scholarship

Within academia, paradigm shifts occur regularly, some more important than others. As the takeover wave of the 1980s ebbs, a significant shift now appears to be in progress in the way the public corporation is understood. Above all, the new thinking emphasizes that political forces shaped the modern corporation. While the old paradigm saw the structure of the corporation as the product of a Darwinian competition in which the most efficient design emerged victorious, this new perspective sees political forces as constraining that evolutionary process and possibly foreclosing the adoption of a superior organizational form. Thus, my colleague Professor Mark ...


Rethinking The Regulation Of Coercive Creditor Remedies, Robert E. Scott Jan 1989

Rethinking The Regulation Of Coercive Creditor Remedies, Robert E. Scott

Faculty Scholarship

The phenomenal growth of personal installment credit over the past forty years has generated inevitable pressures for regulatory reform of consumer credit markets. Much of the impetus for consumer protection has stemmed from the perceived abuses that mark the process of coercive collection upon default. Some of these abuses have been identified, quite properly, as the sort of deceptive or fraudulent practices often associated with industries experiencing rapid growth. But other creditor remedies, though troublesome to many observers, cannot be as easily characterized. For example, many critics have challenged the common practice of self-help repossession and resale of consumer goods ...