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Full-Text Articles in Banking and Finance Law
An Unfortunate "Tail": Reconsidering Risk Management Incentives After The Financial Crisis Of 2007-2009, Douglas O. Edwards
An Unfortunate "Tail": Reconsidering Risk Management Incentives After The Financial Crisis Of 2007-2009, Douglas O. Edwards
University of Colorado Law Review
In recent months, the legal academic community has taken a greater interest in the practice of risk management. Doubtless a response to the recent financial crisis, many have concluded that our current market structure allows for uninhibited risk taking and the pooling of systemic risk. Accordingly, most have suggested a regulatory response is necessary. This Comment, in unreserved agreement with these writers, attempts to contribute to this literature in two ways. First, this Comment explains the development of quantitative risk management to fill in the gaps in the existing legal research. Though I present nothing groundbreaking, my purpose is to …
Deregulation Pas De Deux: Dual Regulatory Classes Of Financial Institutions And The Path To Financial Crisis In Sweden And The United States, Erik F. Gerding
Deregulation Pas De Deux: Dual Regulatory Classes Of Financial Institutions And The Path To Financial Crisis In Sweden And The United States, Erik F. Gerding
Publications
This article presents the following model of two regulatory classes of financial institutions interacting in financial and political markets to spur deregulation and riskier lending and investment, which in turn contributes to the severity of a financial crisis: 1) Regulation creates two categories of financial institutions. The first class faces greater restrictions in lending or investment activities but enjoys regulatory subsidies, such as an explicit or implicit government guarantee, while the second class is more loosely regulated and can make riskier loans or investments and earn additional profits. 2) These additional profits leads to calls for deregulation to enable the …