Banking and Finance Law Commons^™

Equity Crowdfunding: A Market For Lemons?, Darian M. Ibrahim

Faculty Publications

No abstract provided.

Political Uncertainty And The Market For Ipos, Jay B. Kesten, Murat C. Mungan

Faculty Scholarship

This Article presents a simple theory and model of the effects of political uncertainty on the market for IPOs. Our model generates four central predictions: (i) increased political uncertainty reduces the frequency of IPOs; (ii) firms that choose to conduct an IPO during periods of political uncertainty are, on average, of higher quality and generate greater return on investment in the secondary market; (iii) political uncertainty increases the cost of capital for IPO firms; but (iv) underpricing is less pronounced during periods of heightened political uncertainty. We demonstrate that each of these predictions is consistent with available empirical evidence.

Our …

Count The Limbs: Designing Robust Aggregation Clauses In Sovereign Bonds, Anna Gelpern, Ben Heller, Brad Setser

Georgetown Law Faculty Publications and Other Works

On August 29, 2014, the International Capital Market Association (ICMA) published new recommended terms for sovereign bond contracts governed by English law. One of the new terms would allow a super majority of creditors to approve a debtor’s restructuring proposal in one vote across multiple bond series. The vote could bind all bond holders, even if a series voted unanimously against restructuring, so long as enough holders in the other series voted for it. An apparently technical change, awkwardly named “single-limb aggregated collective action clauses (CACs)” promised to eliminate free-riders for the first time in the history of sovereign bond …

It's Time For A Public Option In Banking, Mehrsa Baradaran

Popular Media

Associate Professor Mehrsa Baradaran published this article in The Harvard Law Record on November 16, 2015. It discusses how post offices can provide ordinary citizens with banking services.

How The Us Post Office Can Save America—And Itself, Matt Phillips

Popular Media

Professor Mehrsa Baradaran is interviewed by Quartz on her thoughts about postal banking.

International Tax Considerations: Inbound & Outbound (Slides), Seth Green

William & Mary Annual Tax Conference

No abstract provided.

International Tax Considerations: Inbound & Outbound, Seth Green, Monica Zubler

William & Mary Annual Tax Conference

No abstract provided.

The New Stock Market: Sense And Nonsense, Merritt B. Fox, Lawrence R. Glosten, Gabriel V. Rauterberg

Articles

How stocks are traded in the United States has been totally transformed. Gone are the dealers on NASDAQ and the specialists at the NYSE. Instead, a company’s stock can now be traded on up to sixty competing venues where a computer matches incoming orders. High-frequency traders (HFTs) post the majority of quotes and are the preponderant source of liquidity in the new market. Many practices associated with the new stock market are highly controversial, as illustrated by the public furor following the publication of Michael Lewis’s book Flash Boys. Critics say that HFTs use their speed in discovering changes in …

If The U.S. Government Treated Poor People As Well As It Treats Banks, Mehrsa Baradaran

Popular Media

One of the great ironies in modern America is that the less money you have, the more you pay to use it. The country’s “unbanked” must pay high fees to fringe banks to turn their paychecks into cash, pay their monthly bills, or send money to a spouse or a child. The unbanked pay much of their income—up to 10 percent—just to use their money. For these families, the total price of simple financial services each month is more than they spend on food. Indeed, it is very expensive to be poor. This article makes a proposal, transform underused post …

The Vanishing Supervisor, James A. Fanto

Faculty Scholarship

No abstract provided.

Business Law Bulletin, Fall 2015

Business Law Bulletin

No abstract provided.

A Framework For A Formal Sovereign Debt Restructuring Mechanism: The Kiss Principle (Keep It Simple, Stupid) And Other Guiding Principles, Charles W. Mooney Jr.

All Faculty Scholarship

Given the ongoing work on a multilateral restructuring process for sovereign debt in the UN, consideration of the content and implementation of a sovereign debt restructuring mechanism (SDRM) is timely. The framework and content of the SDRM proposed here differs from earlier proposals in several important respects. For the classification and supermajority voting of claims in the approval a restructuring plan, it would mimic the structure and operation of the model collective action clauses (Model CACs) proposed by the International Capital Markets Association. Restructuring under a qualified sovereign debt restructuring law (QSDRL) would be guided by four principles: (i) observe …

Mandatory Arbitration In Consumer Finance And Investor Contracts, Michael S. Barr

Articles

Mandatory pre-dispute arbitration clauses are pervasive in consumer financial and investor contracts—for credit cards, bank accounts, auto loans, broker-dealer services, and many others. These clauses often ill serve households. Consumers are typically presented with contracts on a “take it or leave it” basis, with no ability to negotiate over terms. Arbitration provisions are often not clearly disclosed, and in any event are not salient for consumers, who do not focus on the importance of the provision in the event that a dispute over the contract later arises, and who may misforecast the likelihood of being in such a dispute. The …

Coordination And Conflict: The Persistent Relevance Of Networks In International Financial Regulation, Robert B. Ahdieh

Faculty Scholarship

Over the last two decades, scholarly enthusiasm about transnational regulatory networks has seen something of a boom-and-bust cycle. Such networks – informal groupings of mid-level national officials, convened to develop nonbinding “soft law” norms of behavior in specialized fields of regulation – were identified as an important new phenomenon, were studied widely, and came to be seen as central pillars of the international legal order, especially in financial regulation. Yet today, regulatory networks go largely unmentioned in polite academic conversation: a kind of “he-who-must-not-be-named” of international law.

Among the many critiques of transnational networks that have contributed to this decline …

From Fedspeak To Forward Guidance: Regulatory Dimensions Of Central Bank Communications, Robert B. Ahdieh

Faculty Scholarship

In the face of the financial crisis that engulfed the globe beginning in 2007, the U.S. Federal Reserve quickly found itself without the key lever of monetary policy on which it had traditionally relied: short-term interest rate adjustments designed to move long-term rates, and thereby expected levels of lending, investment, and capital retention. By late 2008, short-term rates were already close to zero, yet unemployment remained strikingly high – with no sign of any likely renewal of bank lending or commercial investment.

Famously, the Fed embraced so-called quantitative easing – the purchase of massive volumes of public and private debt …

Postal Banking: A Lifesaver For America's Poor, Mehrsa Baradaran

Popular Media

If banks are not providing credit to the poor, the state should provide it directly.The existing post office framework represents the most promising path toward effectuating such a public option. American banks long ago deserted their most impoverished communities, but post offices, even two centuries later, have remained — still rooted in an egalitarian mission. There have never been barriers to entry at post offices, and their services have been available to all, regardless of income.

The Surety's Exposure For Wages And Related Liabilities, Lisa D. Sparks, Marc A. Campsen

All Faculty Scholarship

A surety faces potential exposure to a multitude of liabilities under payment and performance bonds issued for state and federally funded bonded projects as well as from the express obligations imposed by private common law performance and payment bonds. This paper, however, focuses only on a surety’s potential exposure for wage and related liabilities.

Under federal law, a surety faces possible liability under a Miller Act Payment Bond to laborers for the bonded principal’s failure to pay wages. Union trusts may also recover against a surety under a Miller Act Payment Bond for the bonded principal’s failure to remit union …

Vat Fraud And Terrorist Funding - The Azizi Extradition Allegations Part Ii, Richard Thompson Ainsworth

Faculty Scholarship

This paper considers the remaining seven (7) Missing Trader Intra-Community (MTIC) fraud schemes alleged (some conceded) to have been conducted by Samir Azizi, a 25 year old German/Afghan citizen, who was extradited from the United States to Germany on April 14, 2015. The MTIC fraud schemes considered in this Part II involve alleged losses of €45,801,403 under 63 further criminal counts.

Underlying both Parts of this assessment is a fundamental (but unanswered) question: “Who exactly is Samir Azizi? Is he the mastermind of a multi-million euro VAT fraud, a fundraising fraudster for terrorist organizations, or a youthful face-of- convenience disguising …

Trending @ Rwulaw: Susan Schwab Heyman's Post: Defining The Boundaries Of Insider Trading, Susan Schwab Heyman

Law School Blogs

No abstract provided.

Vat Fraud And Terrorist Funding -- The Azizi Extradition Allegations Part I, Richard Thompson Ainsworth

Faculty Scholarship

On April 14, 2015 Samir Azizi, a 25 year old German/Afghan citizen, was extradited from the United States to Germany. The Extradition Compliant alleged (in 89 criminal counts) that Azizi had denied the German Treasury €61,104,368 in VAT revenue with 12 distinct Missing Trader Intra-Community (MTIC) fraud schemes. At the time of arrest the 26 year old Azizi admitted that his involvement in MTIC frauds stretched back even before 2008, the initial reference year of the Complaint.

This paper assesses the Azizi extradition in two parts. The first part considers the first 26 criminal counts, representing alleged VAT losses of …

The Road To Precautionary Review Of Financial Products, Hilary Allen

Articles in Law Reviews & Other Academic Journals

Financial innovation introduces new and complex products into the financial system, providing market participants with more bespoke ways to manage their risk, return and liquidity. However, by increasing the complexity of the financial system, financial innovation also compromises financial stability. Faced with the rapid pace of financial innovation, regulators have two options. One is to seek to meet the complexity of the industry with complex regulation, in an arms race that under-resourced regulators are bound to lose. The less explored (and more controversial) path is for regulators to try to reduce the complexity of the financial system by limiting financial …

Summary Of C. Nicholas Pereos, Ltd. V. Bank Of America, N.A., 131 Nev. Adv. Op. 61553 (July 2, 2015), Stacy Newman

Nevada Supreme Court Summaries

The Court considers an appeal from a district court summary judgment in a tort case concerning losses sustained due to unauthorized activity in a customer’s bank account. The Court reversed the grant of summary judgment because genuine issues of material fact exist regarding whether respondent Bank of America acted reasonably in delivering bank statements, and also because the appellant’s suit was not time barred under a one year period of repose.

Recursive Collective Actions Problems: The Structure Of Procyclicality In Financial And Monetary Markets, Macroeconomies And Formally Similar Contexts, Robert C. Hockett

Cornell Law Faculty Publications

The hallmark of a collective action problem is its aggregating multiple individually rational decisions into a collectively irrational outcome. Arms races, “commons tragedies” and “prisoners’ dilemmas” are well-known, indeed well-worn examples. What seem to be less widely appreciated are two complementary propositions: first, that some collective action problems bear iterative, self-exacerbating structures that render them particularly destructive; and second, that some of the most formidable challenges faced by economies, societies, and polities are iteratively self-worsening problems of precisely this sort. Financial markets, monetary systems and macroeconomies in particular are rife with them – as are other complex systems subject to …

Finding A Financial Planner, Emily G. Brown Jd

Pension Action Center Publications

This fact sheet provides information on how to find the right financial planner to help you meet your retirement planning goals. This fact sheet suggests things to consider prior to picking a financial planner and answers questions like:

• What do financial planners do?
• How do you know if you need a financial planner?
• How do you find the right financial planner?
• What type of professional title does a financial planner have?

The New Synthesis Of Bank Regulation And Bankruptcy In The Dodd-Frank Era, David A. Skeel Jr.

All Faculty Scholarship

Since the enactment of the Dodd-Frank Act in 2010, U.S. bank regulation and bankruptcy have become far more closely intertwined. In this Article, I ask whether the new synthesis of bank regulation and bankruptcy is coherent, and whether it is likely to prove effective.

I begin by exploring some of the basic differences between bank resolution, which is a highly administrative process in the U.S., and bankruptcy, which relies more on courts and the parties themselves. I then focus on a series of remarkable new innovations designed to facilitate the rapid recapitalization of systemically important financial institutions: convertible contingent capital …

The Federal Reserve And A Cascade Of Failures: Inequality, Cognitive Narrowness And Financial Network Theory, Emma Coleman Jordan

Georgetown Law Faculty Publications and Other Works

The recent financial crisis hollowed out the core of American middle-class financial stability. In the wake of the financial crisis, household net worth in the U.S. fell by 24%, for a loss of $16 trillion. Moreover, retirement accounts, the largest class of financial assets, took a steep drop in value, as did house prices, and these two classes of assets alone represent approximately 43% of all household wealth. The losses during the principal crisis years, 2007–2009, were devastating, “erasing almost two decades of accumulated prosperity,” in the words of a 2013 report. By the Federal Reserve. Beyond these direct household …

Investing And Pretending, Anita Krug

All Faculty Scholarship

One of the more prominent components of Dodd–Frank’s regulatory changes was Title VII, providing for the regulation of the over-the-counter derivatives known as “swaps.” A swap is a financial instrument whose value is based on an asset—the “reference asset”—that is wholly unrelated to the swap itself. Although there was much ado about swap regulation immediately after Dodd–Frank’s enactment, the same cannot be said of the many rules that the Commodity Futures Trading Commission (“CFTC”) has subsequently adopted pursuant to its authority under Title VII. This Article critically evaluates the CFTC’s “swap rules” and identifies the regulatory vision that they reflect. …

Summary Of Munoz V. Branch Banking & Trust Co., 131 Nev. Adv. Op. No. 23 (Apr. 30, 2015), Michael S. Valiente

Nevada Supreme Court Summaries

NRS 40.459(1)(c)’s limitation on the amount of deficiency judgment that a successor can recover conflicts with the federal Financial Institutions Reform, Recovery and Enforcement Act’s (“FIRREA”) purpose of facilitating the transfer of assets of failed banks to other institutions. Because NRS 40.459(1)(c) limits the value a successor can recover on a deficiency judgment, its application to assets transferred by the Federal Deposit Insurance Corporation (“FDIC”) frustrates FIRREA’s purpose. Therefore, NRS 40.459(1)(c) is preempted by FIRREA to the extent that NRS 40.459(1)(c) limits deficiency judgment that may be obtained from loans transferred by the FDIC.

Summary Of Branch Banking & Trust V. Windhaven & Tollway, Llc, 131 Nev. Adv. Op. 20 (Apr. 30, 2015), Joseph Meissner

Nevada Supreme Court Summaries

The Court determined the proper interpretation of NRS 40.455(1), and applied it in a claim for a deficiency judgment following an out-of-state nonjudicial foreclosure. NRS 40.455(1) “does not require an out-of-state trustee’s sale to comply with NRS 107.080, nor does it preclude a deficiency judgment in Nevada when a nonjudicial foreclosure sale is conducted pursuant to the laws of another state.”

From The Fuggers To Justice Ginsburg, Nathan B. Oman

Popular Media

No abstract provided.