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Afterword: Why 'Taming The Megabanks' Should Remain A Top Priority For Financial Regulators And Policymakers, Arthur E. Wilmarth Jr.
Afterword: Why 'Taming The Megabanks' Should Remain A Top Priority For Financial Regulators And Policymakers, Arthur E. Wilmarth Jr.
GW Law Faculty Publications & Other Works
This essay was published as part of a law review symposium that evaluated my work on the regulation of large, complex financial institutions. Part I of my essay discusses the other articles published in the symposium issue and describes their relationship to my own work. Part II analyzes the global financial crisis that began in March 2020, following the outbreak and rapid spread of the COVID-19 virus. Part II also reviews the extraordinary actions taken by governments and central banks in response to that crisis. Part II argues that the pandemic- induced financial crisis and its aftermath confirm two lessons …
It's Time To Regulate Stablecoins As Deposits And Require Their Issuers To Be Fdic-Insured Banks, Arthur E. Wilmarth Jr.
It's Time To Regulate Stablecoins As Deposits And Require Their Issuers To Be Fdic-Insured Banks, Arthur E. Wilmarth Jr.
GW Law Faculty Publications & Other Works
In November 2021, the President’s Working Group on Financial Markets (PWG) issued a report analyzing the rapid expansion and growing risks of the stablecoin market. PWG’s report determined that stablecoins pose a wide range of potential hazards, including the risks of inflicting large losses on investors, destabilizing financial markets and the payments system, supporting money laundering, tax evasion, and other forms of illicit finance, and promoting dangerous concentrations of economic and financial power. PWG called on Congress to pass legislation that would require all issuers of stablecoins to be banks that are insured by the Federal Deposit Insurance Corporation (FDIC). …
The Pandemic Crisis Shows That The World Remains Trapped In A 'Global Doom Loop' Of Financial Instability, Rising Debt Levels, And Escalating Bailouts, Arthur E. Wilmarth Jr.
The Pandemic Crisis Shows That The World Remains Trapped In A 'Global Doom Loop' Of Financial Instability, Rising Debt Levels, And Escalating Bailouts, Arthur E. Wilmarth Jr.
GW Law Faculty Publications & Other Works
In January 2020, I completed a book (Taming the Megabanks: Why We Need a New Glass- Steagall Act) analyzing the financial crises that precipitated the Great Depression of the 1930s and the recent Great Recession. My book argued that the world’s financial system was caught in a “global doom loop” at the beginning of 2020. Bailouts and economic stimulus programs during and after the global financial crisis of 2007-09 (GFC) had imposed heavy debt burdens on most governments, and leading central banks were carrying bloated balance sheets. The rescues arranged by governments and central banks during the GFC created a …
Taming The Megabanks: Why We Need A New Glass-Steagall Act, Arthur E. Wilmarth Jr.
Taming The Megabanks: Why We Need A New Glass-Steagall Act, Arthur E. Wilmarth Jr.
GW Law Faculty Publications & Other Works
This blog post was published in The FinReg Blog (hosted by Duke’s Global Financial Markets Center) on September 24, 2020. It provides an overview of my book of the same title, published by Oxford University Press on October 2, 2020.
Narrow Banking As A Structural Remedy For The Problem Of Systemic Risk: A Comment On Professor Schwarcz's Ring-Fencing, Arthur E. Wilmarth Jr.
Narrow Banking As A Structural Remedy For The Problem Of Systemic Risk: A Comment On Professor Schwarcz's Ring-Fencing, Arthur E. Wilmarth Jr.
GW Law Faculty Publications & Other Works
In a recent article, Professor Steven Schwarcz describes the concept of "ring-fencing" as a "potential regulatory solution to problems in banking, finance, public utilities, and insurance." Ring-fencing has gained particular prominence in recent years as a strategy for limiting the systemic risk of large financial conglomerates (also known as "universal banks"). Professor Schwarcz’s article describes several ring-fencing plans that have been adopted or proposed in the United States, the United Kingdom, and the European Union.
This Comment argues that "narrow banking" is a highly promising ring-fencing remedy for the risks created by universal banks. As the Comment explains, narrow banking …