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2012

Banking and Finance Law

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Articles 1 - 30 of 98

Full-Text Articles in Law

Mapping The Future Of Insider Trading Law: Of Boundaries, Gaps, And Strategies, John C. Coffee Jr. Dec 2012

Mapping The Future Of Insider Trading Law: Of Boundaries, Gaps, And Strategies, John C. Coffee Jr.

Faculty Scholarship

The current law on insider trading is arbitrary and unrationalized in its limited scope in a number of respects. For example, if a thief breaks into your office, opens your files, learns material, nonpublic information, and trades on that information, he has not breached a fiduciary duty and is presumably exempt from insider trading liability. But drawing a line that can convict only the fiduciary and not the thief seems morally incoherent. Nor is it doctrinally necessary. The basic methodology handed down by the Supreme Court in SEC v. Dirks and United States v. O’Hagan dictates (i) that a ...


The Borrower's Tale: A History Of Poor Debtors In Lochner Era New York City, Anne Fleming Nov 2012

The Borrower's Tale: A History Of Poor Debtors In Lochner Era New York City, Anne Fleming

Georgetown Law Faculty Publications and Other Works

This study adds to the recent scholarship on Progressivism in practice—fine-grained, place-based studies of reform at the local level—but focuses closely on the relationships among reformers, industry, and the law that an earlier generation of historians studied at the national level and outlined in broad brushstrokes. This study also builds upon the creditor-centered work of historians such as Mark H. Haller and John V. Alviti, but moves beyond their reliance upon distinctions and categories, such as those separating profit making credit providers from philanthropic credit providers, which were less important to borrowers than they have been for historians ...


Order On Motion To Dismiss (Benfield V. Wells Et Al.), John J. Goger Oct 2012

Order On Motion To Dismiss (Benfield V. Wells Et Al.), John J. Goger

Georgia Business Court Opinions

No abstract provided.


Avalon Holdings , Llc V. Ameris Bank, Et Al. Order On Jnov, Melvin K. Westmoreland Oct 2012

Avalon Holdings , Llc V. Ameris Bank, Et Al. Order On Jnov, Melvin K. Westmoreland

Georgia Business Court Opinions

No abstract provided.


Business Law Bulletin, Fall 2012 Oct 2012

Business Law Bulletin, Fall 2012

Business Law Bulletin

No abstract provided.


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

Scholarly Publications

No abstract provided.


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 ...


Dynamic Resolution Of Large Financial Institutions, Thomas H. Jackson, David A. Skeel Jr. Oct 2012

Dynamic Resolution Of Large Financial Institutions, Thomas H. Jackson, David A. Skeel Jr.

Faculty Scholarship at Penn Law

One of the more important issues emerging out of the 2008 financial crisis concerns the proper resolution of a systemically important financial institution. In response to this, Title II of Dodd-Frank created the Orderly Liquidation Authority, or OLA, which is designed to create a resolution framework for systemically important financial institutions that is based on the resolution authority that the FDIC has held over commercial bank failures. In this article, we consider the various alternatives for resolving systemically important institutions. Among these alternatives, we discuss OLA, a European-style bail-in process, and coerced mergers, while also extensively focusing on the bankruptcy ...


Reverse Regulatory Arbitrage: An Auction Approach To Regulatory Assignments, Frederick Tung, M Todd Henderson Aug 2012

Reverse Regulatory Arbitrage: An Auction Approach To Regulatory Assignments, Frederick Tung, M Todd Henderson

Faculty Scholarship

In the years before the Financial Crisis, banks got to pick their regulators, engaging in a form of regulatory arbitrage that we now know was a race to the bottom. We propose to turn the tables on the banks by allowing regulators, specifically, bank examiners, to choose the banks they regulate. We call this “reverse regulatory arbitrage,” and we think it can help improve regulatory outcomes. Building on our prior work that proposes to pay bank examiners for performance — by giving them financial incentives to avoid bank failures — we argue that bank supervisory assignments should be set through an auction ...


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 ...


The Goldilocks Approach: Financial Risk And Staged Regulation, Charles K. Whitehead Jul 2012

The Goldilocks Approach: Financial Risk And Staged Regulation, Charles K. Whitehead

Cornell Law Faculty Publications

Financial firms engage in a wide range of private conduct. New rules that address financial risk can regulate elements of that conduct but not all conduct or all the factors that affect conduct. There is, therefore, a real concern that new regulation will have unanticipated consequences, particularly in a system as complex as the financial markets. The result may be new risks or a shift in risk taking away from regulated conduct — responses that regulators can anticipate but may not be able to accurately predict or control.

This Article cautions against the rush to adopt new financial risk regulation without ...


Baltimore After The War Of 1812: Where Robert Mills Met His Waterloo And When James A. Buchanan Broke The Bank, Garrett Power Jun 2012

Baltimore After The War Of 1812: Where Robert Mills Met His Waterloo And When James A. Buchanan Broke The Bank, Garrett Power

Faculty Scholarship

In 1815 Baltimore City was boom town. Its militiamen had repulsed the British sea invasion and presaged an end to the War of 1812. Napoleon’s defeat at Waterloo in 1815 signaled an end to European wars. Freedom of the seas had been restored. The Baltimore “Clipper” was the best sailing ship on the ocean. Baltimore looked to become the country’s leading exporter of grain, flour, and tobacco. Merchant James A. Buchanan, a partner in one of the country’s greatest shipping firms, had been named President of the Baltimore Branch of the Second National Bank of the United ...


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 ...


The Greatest Mall There Never Was: Assessing The Failed Attempt To Build The New Haven Galleria, Jeremy Kutner May 2012

The Greatest Mall There Never Was: Assessing The Failed Attempt To Build The New Haven Galleria, Jeremy Kutner

Student Legal History Papers

In late 1995, a dream that had fixated New Haven’s leadership since the 1960’s was coming to an end. Long buffeted by a population and wealth exodus to the suburbs, leaders had looked to a glittery downtown shopping mall to draw people, and their money, back to the city. Downtown was remade to accommodate retail heavy hitters: Macy’s, Malley’s, and the Chapel Square Mall. But it wasn’t working. Macy’s was gone. Chapel Square was hemorrhaging tenants. And so, after decades of public effort to make large-scale retail work downtown, the city’s mayor was ...


Were "It" To Happen: Contract Continuity Under Euro Regime Change, Robert C. Hockett Apr 2012

Were "It" To Happen: Contract Continuity Under Euro Regime Change, Robert C. Hockett

Cornell Law Faculty Working Papers

One way or another, the European Monetary Union (EMU) is apt to endure. The prospect of continuation under the precise contours of the regime as we presently find it, however, is anything but certain. Hence many investors and other actual or prospective contract parties are likely to remain skittish until matters grow clearer. This skittishness, importantly, can itself hamper the prospect of expeditious European recovery. Addressing particular sources of ongoing uncertainty about EMU prospects can itself therefore aid in the project of recovery.

This Essay accordingly aims to impose structure upon one particular, and indeed particularly complex, source of uncertainty ...


Business Law Bulletin, Spring 2012 Apr 2012

Business Law Bulletin, Spring 2012

Business Law Bulletin

No abstract provided.


Bankers, Bureaucrats, And Guardians: Toward Tripartism In Financial Services Regulation, Saule T. Omarova Apr 2012

Bankers, Bureaucrats, And Guardians: Toward Tripartism In Financial Services Regulation, Saule T. Omarova

Cornell Law Faculty Publications

This Article advocates the statutory creation of a new form of tripartite regulatory regime aimed at the detection and prevention of systemic risk in the financial sector. Although it leaves many significant details blank and many important questions unanswered, this Article offers a radically new vision of the financial services regulation as a process involving three equal participants: bankers, bureaucrats, and guardians of the public interest. Admittedly, this vision is not likely to become reality in the near future. Nor is it meant as a comprehensive plan to solve the problem of effective systemic risk regulation in the financial sector ...


Paying Bank Examiners For Performance, Frederick Tung, M. Todd Henderson Apr 2012

Paying Bank Examiners For Performance, Frederick Tung, M. Todd Henderson

Faculty Scholarship

Investigations into the recent financial crisis have found that banking regulators knew or should have known of many of the problems that would ultimately cripple the finance industry. We argue that their failure to address those problems prior to the crisis was at least partly due to misaligned incentives for bank examiners that encourage inadequate inspection and forbearance and discourage the curbing of ill-advised risk taking. We recommend changing examiners’ incentives to better align them with the public good. Specifically, banking regulators should be “paid for performance” — rewarded for nurturing long-term health for the banks they oversee as well as ...


Hard, Soft, And Embedded: Implementing Principles On Promoting Responsible Sovereign Lending And Borrowing, Anna Gelpern Apr 2012

Hard, Soft, And Embedded: Implementing Principles On Promoting Responsible Sovereign Lending And Borrowing, Anna Gelpern

Georgetown Law Faculty Publications and Other Works

This paper, prepared for UNCTAD’s initiative on responsible sovereign lending and borrowing, considers concrete strategies for implementing the Principles. It draws on studies in soft law and new governance, and on the recent experience in promoting best practices in international finance, including project finance, extraction revenue management, foreign aid, sovereign investment, and sovereign borrowing in the capital markets. It recommends maintaining the current non-binding character of the Principles, while embedding implementation in multi-stakeholder arrangements for ongoing disclosure, assessment, interpretation, and adaptation. This strategy has the best chance of changing behavior in sovereign lending and borrowing by creating constituencies for ...


Structured Notes Fiasco In The Courts: A Study Of Relevant Judgments In Taiwan Between 2009 And 2010, Christopher Chao-Hung Chen Mar 2012

Structured Notes Fiasco In The Courts: A Study Of Relevant Judgments In Taiwan Between 2009 And 2010, Christopher Chao-Hung Chen

Research Collection School Of Law

The purpose of this article is to analyse relevant judicial decisions in Taiwan regarding structured notes sold to retail investors. Regarding pre-sale disputes, one issue was that investors failed to read contractual documents properly before signing contracts, so there was a question whether they could later claim a bank’s violation of its duty to explain. This article favours the view that an investor’s signature may exempt a bank’s duty, provided that investors are made aware of relevant warnings. In addition, for suitability assessment, relevant judgments show that customers were too easily classified as active investors based on ...


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 ...


Reconsidering The Separation Of Banking And Commerce, Mehrsa Baradaran Feb 2012

Reconsidering The Separation Of Banking And Commerce, Mehrsa Baradaran

Scholarly Works

This Article examines the long-held belief that banking and commerce need to be kept separate to ensure a stable banking system. Specifically, the Article criticizes the Bank Holding Company Act (“BHCA”), which prohibits nonbanking entities from owning banks. The recent banking collapse has caused and exacerbated several problematic trends in U.S. banking, especially the conglomeration of banking entities and the homogenization of assets. The inflexible and outdated provisions of the BHCA are a major cause of these trends. Since the enactment of the BHCA, the landscape of U.S. banking has changed dramatically, but the strict separation of banking ...


Why Mortgage "Formalities" Matter, David A. Dana Jan 2012

Why Mortgage "Formalities" Matter, David A. Dana

Faculty Working Papers

This Article argues that adherence to mortgage formalities regarding foreclosure is valuable for expressive reasons and also as a potential deterrent to future undesirable underwriting and securitization practices. The Article reviews how some courts have in effect written procedural requirements for foreclosure out of the law, and asks why these courts have done so and whether lenders' behavior might have been improved during this housing crisis had the state courts uniformly afforded equal respect to the legal rights of homeowners and those of lenders.


Guilty By Proxy: Expanding The Boundaries Of Responsibility In The Face Of Corporate Crime, Amy J. Sepinwall Jan 2012

Guilty By Proxy: Expanding The Boundaries Of Responsibility In The Face Of Corporate Crime, Amy J. Sepinwall

Legal Studies and Business Ethics Papers

The BP oil spill and financial crisis share in common more than just profound tragedy and massive clean-up costs. In both cases, governmental commissions have revealed widespread wrongdoing by individuals and the entities for which they work. The public has demanded justice, yet the law enforcement response in both cases has been underwhelming. In particular, no criminal indictments have been sought for any of the corporations responsible for the Macondo oil-rig explosion or for the Wall Street banks involved in the financial meltdown.

This governmental restraint reflects a deep-seated ambivalence about corporate criminal liability. Though scholars have been debating the ...


Pawnshops, Behavioral Economics, And Self Regulation, Paige Marta Skiba, Susan Payne Carter Jan 2012

Pawnshops, Behavioral Economics, And Self Regulation, Paige Marta Skiba, Susan Payne Carter

Vanderbilt Law School Faculty Publications

Pawnbroking is the oldest source of credit. There is growing public interest in day-to-day pawnbroking operations, as evidenced by the popularity of reality shows such as “Pawn Stars” and “Hardcore Pawn.” Television viewers’ curiosity about an old credit institution may be due to the fact that 7% of all U.S. households have used pawn credit. Although pawnshops predate biblical times, researchers know surprisingly little about this ancient form of banking and its customers. We fill this gap by documenting detailed information on pawnshop loan repayment and default, and by discussing how pawnshop borrowers’ behavior is consistent with various behavioral ...


Regulation Of Payday Loans: Misguided?, Paige Marta Skiba Jan 2012

Regulation Of Payday Loans: Misguided?, Paige Marta Skiba

Vanderbilt Law School Faculty Publications

Since payday lenders came on the scene in 1990s, regulation of their "predatory" practices has been swift and often severe. Fourteen states now ban payday loans outright. From an economist's perspective, high-interest, short-term, small loans need not be a bad thing. Payday credit can help borrowers "smooth" consumption, unequivocally improving welfare as consumers borrow from future good times to help cover current shortfalls. These benefits of credit can accrue even at typical payday loan interest rates of 300%-600% APR. The question of whether payday credit actually assists borrowers in this way is an empirical one. In this Article ...


Misregulation Of Person To Person Lending, Andrew Verstein Jan 2012

Misregulation Of Person To Person Lending, Andrew Verstein

Lecturer and Other Affiliate Scholarship Series

Amid a financial crisis and credit crunch, retail investors are lending a billion dollars over the Internet, on an unsecured basis, to total strangers. Technological and financial innovation allows person-to-person (“P2P”) lending to connect lenders and borrowers in inspiring ways never before imagined. However, all is not well with P2P lending. The SEC threatens the entire industry by asserting jurisdiction with a fundamental misunderstanding of P2P lending. This Article illustrates how the SEC has transformed this industry, making P2P lending less safe and more costly, threatening its very existence. The SEC’s misregulation of P2P lending provides an opportunity to ...


Further To Professor Alldridge's "Caffeinated" Article: What "Stuff' Did The Professor Have In Mind?, Bruce Bean Jan 2012

Further To Professor Alldridge's "Caffeinated" Article: What "Stuff' Did The Professor Have In Mind?, Bruce Bean

Faculty Publications

No abstract provided.


Legal Political Moral Hazard: Does The Dodd-Frank Act End Too Big To Fail?, Troy S. Brown Jan 2012

Legal Political Moral Hazard: Does The Dodd-Frank Act End Too Big To Fail?, Troy S. Brown

Faculty Publications

No abstract provided.


Built To Scale: Small Business Policy And The Meltdown, Michael P. Malloy Jan 2012

Built To Scale: Small Business Policy And The Meltdown, Michael P. Malloy

McGeorge School of Law Scholarly Articles

No abstract provided.