Comparative and Foreign Law Commons^™

The Rise-And-Fall Of Leading International Financial Centers: Factors And Application, Adam Church

Michigan Business & Entrepreneurial Law Review

This Note will look at the role of four broad factors that correspond with the rise-and-fall cycles among leading international financial centers. The four factors are: trust in a financial center’s abilities; the central banking and monetary policy systems of the center’s home nation; the home nation’s landscape of financial policy and regulation; and the overall stability of the financial center itself. First, this Note will undertake a broad historical survey of the shifts in prominence from Amsterdam to London, from London to New York, and from New York back to London to define the scope of these factors through …

Change In Regulation Is Necessary For Genetically Engineered Mosquitoes, Insung Hwang

Michigan Journal of Environmental & Administrative Law

Millions of genetically engineered (GE) mosquitoes could soon be released in Key West, Florida as an effort to eradicate wild mosquitoes that are transmitters of diseases such as malaria, dengue, and chikungunya. Both international and domestic regulations fail to provide effective regulatory schemes that can facilitate the application of this technology while ensuring all safety and environmental aspects are properly addressed. The Food and Drug Administration’s assertion of jurisdiction is based on its assessment that the GE mosquitoes are “animal drugs” under the Federal Food, Drug, and Cosmetic Act. This is especially troublesome because the end goal of using these …

Protecting The State From Itself? Regulatory Interventions In Corporate Governance And The Financing Of China's 'State Capitalism', Nicholas C, Howson

Book Chapters

From the start of China’s “corporatization without privatization” process in the late 1980s, a Chinese corporate governance regime, apparently shareholder-empowering and determined by enabling legal norms, has been altered by mandatory governance mechanisms imposed by a state administrative agency, the China Securities Regulatory Commission (CSRC). This has been done to protect minority shareholders against exploitation by the Party-state controlling shareholders, the power behind China’s “state capitalism.” This chapter reviews the path of this benign intervention by the CSRC and the structural reasons for it, and then speculates on why this novel example of the China’s “fragmented authoritarianism” continues to be …

Private Equity Investments In Microfinance In India, Hugh Manahan

Michigan Business & Entrepreneurial Law Review

A trail connects a skyscraper in Manhattan’s Financial District to a tiny food stand in a village in the southeast Indian state of Tamil Nadu. Initially wild and overgrown, the trail now resembles a well-developed road, cleared and shaped. The trail does not connect customers to call centers or raw materials to laborers; the path connects lenders seeking abnormal returns on their investments to borrowers living in poverty. This is the path of private equity investments in microfinance. Microfinance is a powerful financial innovation that has changed personal finance in many parts of the world. While microfinance began as non-profit …

Regulation Of Private Equity In Brazil: Policy Questions Presented And Critique, Shannon Guy

Michigan Business & Entrepreneurial Law Review

In this note, I explore some of the policy questions affecting Brazil’s private equity industry that the country must tackle. In Part II, Section A, I begin by asking the threshold question of whether the Brazilian government should play an active role in encouraging the growth of the private equity industry. I resolve that Brazil should play an active role in encouraging the industry’s growth to encourage several possible benefits to the real economy. Private equity may benefit the economy by providing job growth and job preservation, improved access to credit for firms that would not otherwise have funds, and …

Private Regulation Of Insider Trading In The Shadow Of Lax Public Enforcement: Evidence From Canadian Firms, Laura Nyantung Beny, Anita Anand

Articles

Like firms in the United States, many Canadian firms voluntarily restrict trading by corporate insiders beyond the requirements of insider trading laws (i.e., super-compliance). Thus, we aim to understand the determinants of firms’ private insider trading policies (ITPs), which are quasi-contractual devices. Based on the assumption that firms that face greater costs from insider trading (or greater benefits from restricting insider trading) ought to be more inclined than other firms to adopt more stringent ITPs, we develop several testable hypotheses. We test our hypotheses using data from a sample of firms included in the Toronto Stock Exchange/Standard and Poor’s (TSX/S&P) …

The Basel Iii Liquidity Coverage Ratio And Financial Stability, Andrew W. Hartlage

Michigan Law Review

Banks and other financial institutions may increase the amount of credit available in the financial system by borrowing for short terms and lending for long terms. Though this "maturity transformation" is a useful and productive function of banks, it gives rise to the possibility that even prudently managed banks could fail due to a lack of liquid assets. The financial crisis of 2007-2008 revealed the extent to which the U.S. financial system is exposed to the risk of a system-wide failure from insufficient liquidity. Financial regulators from economies around the world have responded to the crisis by proposing new, internationally …

Private Equity In Brazil: Industry Overview And Regulatory Environment, Shannon Guy

Michigan Business & Entrepreneurial Law Review

The overall goal of this note is to paint a picture of the current state of the private equity industry in Brazil and the existing regulations which must be obeyed to participate as a private equity investor. Part II of this note provides a brief history of the private equity industry in Brazil, discusses recent investor interest in the growing area, and introduces the main regulatory bodies in Brazil. Part III explains several specific rules that govern a private equity investment by breaking down the “life” of a private equity investment into four stages: (1) setting up the private equity …

Enforcement Without Foundation? Insider Trading And China's Administrative Law Crisis, Nicholas C. Howson

Articles

China's securities regulator enforces insider trading prohibitions pursuant to non-legal and non-regulatory internal "guidance." Reported agency decisions indicate that enforcement against insider trading is often possible only pursuant to this guidance, as the behavior identified is far outside of the scope of insider trading liability provided for in statute or regulation. I argue that the agency guidance is itself unlawful and unenforceable, because: (i) the guidance is not the regulatory norm required by the statutory delegation of power; and (ii) the guidance is ultra vires because (a) it addresses something substantively different from what is authorized under the statutory delegation, …

Does Law Matter Online - Empirical Evidence On Privacy Law Compliance, Michael Birnhack, Niva Elkin-Koren

Michigan Telecommunications & Technology Law Review

Does law matter in the information environment? What can we learn from the experience of applying a particular legal regime to the online environment? Informational privacy (or to use the European term, data protection) provides an excellent illustration of the challenges faced by regulators who seek to secure user rights and shape online behavior. A comprehensive study of Israeli website compliance with information privacy regulation in 2003 and 2006 provides insights for understanding these challenges. The study examined the information privacy practices of 1360 active websites, determining the extent to which these sites comply with applicable legal requirements related to …

Ability To Pay, John A. E. Pottow

Articles

The landmark Dodd-Frank Act of 2010 ("Dodd-Frank") transforms the regulation of consumer credit in the United States. Many of its changes have been high-profile, attracting considerable media and scholarly attention, most notably the establishment of the Consumer Financial Protection Bureau ("CFPB"). Even specific consumer reforms, such as a so-called "plain vanilla" proposal, drew hot debate and lobbying firepower. But when the dust settled, one profoundly transformative innovation that did not garner the same outrage as plain vanilla or the CFPB did get into the law: imposing upon lenders a duty to assure a borrower's ability to repay. Ensuring a borrower's …

Populist Retribution And International Competition In Financial Services Regulation, Adam C. Pritchard

Articles

The pattern of regulatory reform in financial services regulation follows a predictable pattern in democratic states. A hyperactive market generates a bubble, the bubble deflates, and much financial pain ensues for those individuals who bought at the top of the market. The financial mess brings the scrutiny of politicians, who vow "Never again!" A political battle ensues, with representatives of the financial services industry fighting a rearguard action to preserve its prerogatives amidst cries for the bankers' scalps. Regulations, carefully crafted to win the last war, are promulgated. Memories fade of the foolish enthusiasm that fed the last bubble. Slowly, …

The Chinese Regulatory Licensing Regime For Pharmaceutical Products: A Law And Economics Analysis, Qing Zhang

Michigan Telecommunications & Technology Law Review

China's pharmaceutical market has expanded dramatically in the past twenty years and is expected to become the largest in the world by the year 2050. However, entry to the market remains difficult for many international pharmaceutical manufacturers due to the country's costly and complicated regulatory licensing requirements. This Article provides an overview of the regulatory licensing regime for pharmaceutical products in China. Then, the Article evaluates three key features of the regulatory licensing regime through a law and economics approach. These features include the use of licensing, as contrasted with alternative regulatory and non-regulatory mechanisms; the standards to be met …

London As Delaware?, Adam C. Pritchard

Articles

Jurisdictional competition in corporate law has long been a staple of academic-and sometimes, political-debate in the United States. State corporate law, by long-standing tradition in the United States, determines most questions of internal corporate governance-the role of boards of directors, the allocation of authority between directors, managers and shareholders, etc.-while federal law governs questions of disclosure to shareholders-annual reports, proxy statements, and periodic filings. Despite substantial incursions by Congress, most recently in the Sarbanes-Oxley Act of 2002, this dividing line between state and federal law persists, so state law arguably has the most immediate impact on corporate governance outcomes.

London As Delaware?, Adam C. Pritchard

Articles

In the United States, state corporate law determines most questions of internal corporate governance - the role of directors; the allocation of authority between directors, managers, and shareholders; etc. - while federal law governs questions of disclosure to shareholders - annual reports, proxy statements, and periodic filings. Despite substantial incursions by Congress, most recently with the Sarbanes-Oxley Act, this dividing line between state and federal law persists, so state law arguably has the most immediate effect on corporate governance outcomes.

Impediments To Financial Development In The Banking Sector: A Comparison Of The Impact Of Federalism In The United States And Germany, Khalil Nicholas Maalouf

Michigan Journal of International Law

This Note examines how differences in U.S. and German variants of federalism have contributed to the formation and development of the dual banking system in the United States and the three-pillar banking system in Germany. Specifically, this Note considers the manner in which federalism has informed the respective banking systems' reactions to dynamic changes in the global banking industry and analyzes the role federalism has played in contributing to or impeding reform efforts in the United States and Germany.

Insider Trading Rules Can Affect Attractiveness Of Country's Stock Markets, Laura Nyantung Beny

Articles

The academic debate about the desirability of prohibiting insider trading is longstanding and as yet unresolved. Until Henry Manne’s 1966 book, Insider Trading and the Stock Market, the debate centered on whether insider trading is unfair to public investors who are not privy to private corporate information. However, the fairness approach is malleable and indeterminate and thus does not lend itself to clear-cut policy prescriptions. Since Manne’s book, the focus of the debate has been on the effect of insider trading on economic efficiency. Manne argued that, contrary to the prevailing legal and moral opinion of the time, insider trading …

What's Your Sign? -- International Norms, Signals, And Compliance, Charles K. Whitehead

Michigan Journal of International Law

This Article proposes a new approach to understanding state compliance with international obligations, positing that increased interaction among the world's regulators has reinforced network norms, as evidenced in part by a greater reliance among states on legally nonbinding instruments. This Article also begins to fill a gap in the growing scholarship on state compliance by proposing a better framework for understanding how international norms influence senior regulators and how they affect both state decisions to comply as well as levels of compliance.

The Next Generation: Milhaupt And West On Japanese Economic Law, Kent Anderson

Michigan Journal of International Law

Review of Economic Organizations and Corporate Governance in Japan: The Impact of Formal and Informal Rules by Curtis Milhaupt & Mark West

Well-Known Seasoned Issuers In Canada, Adam C. Pritchard

Other Publications

The United States Securities and Exchange Commission (SEC) recently adopted a series of rules relaxing the restrictions imposed on public offerings. The largest public companies - defined as “well-known seasoned issuers” (WKSIs) - received the most extensive regulatory relief. Canada could adopt a version of WKSI status for the top tier of Toronto Stock Exchange (TSX) issuers as part of a streamlined POP system.

Careful consideration must be given, however, as to the appropriate standards for WKSI status in Canada. The standards adopted in the U.S. – US$700 million in market capitalization or US$1 billion in nonconvertible debt issued over …

Offshore Outsourcing And Worker Rights, Theodore J. St. Antoine

Articles

For the workers in the Rust Belt of the United States, concentrated in Southern New England, Western New York State, Pennsylvania, Ohio, Michigan, Indiana, and Illinois, it doesn't make much difference whether their jobs are outsourced or lost to North Carolina or Mexico or China. In any event the sources of income that have existed for generations are gone and the economic and psychic pains are much the same. Nonetheless, for purposes of national policy it plainly matters whether the work is moving to another part of the country or is leaving the United States entirely. I am going to …

Regulatory Frameworks In International Law, Hilary Charlesworth, Christine M. Chinkin

Book Chapters

Regulatory theory is concerned with how various forms of regulation, including law, govern social interaction. Much of the theoretical work on legal regulation has been developed in the context of domestic law. This chapter examines international law in the particular setting of regulation of outsider entities, such as failed and nascent states, that is where international regulation fills the vacuum caused by the collapse of domestic institutions and the rule of law. Through a brief examination of international regulation in Bosnia–Hercegovina and East Timor, this chapter asks what light a regulatory lens sheds on international law. Drawing on Hugh Collins's …

Managed Care Regulation: Can We Learn From Others? The Chilean Experience, Timothy Stoltzfus Jost

University of Michigan Journal of Law Reform

Because the United States relies on private insurance for financing health care to a much greater degree than do other nations, and because managed care as a form of private insurance is further developed in the United States than elsewhere, it is arguable that we have little to learn from other nations about managed care regulation. This Article tests this hypothesis with respect to Chile, a country where private insurance is widespread and managed care is emerging. It concludes that by studying the experience of other nations we might gain a larger perspective on the context of our concerns in …

Convergence And Competition: The Case Of Bank Regulation In Britain And The United States, Heidi Mandanis Schooner, Michael Taylor

Michigan Journal of International Law

This Article consists of four main parts. Part I introduces the convergence by competition model as it applies to the regulation of financial institutions and sets the stage for the test case application of the model to the regulatory systems in the United States and United Kingdom. Part II provides a comparative history of bank regulation in Britain and the United States. Central to our argument is the proposition that, even in the presence of globalized financial markets and the opportunities for rule competition brought in their wake, the bank regulatory systems of the United States and Britain continue to …

Disclosure In Global Securities Offerings: Analysis Of Jurisdictional Approaches, Commonality And Reciprocity, Marc I. Steinberg, Lee E. Michaels

Michigan Journal of International Law

This article presents a summary of the regulatory systems currently in place in the world's major markets. This summary focuses primarily on the disclosure rules that must be followed by a company undertaking an equity offering in each country. Certain significant accounting standards also are discussed. After comparing the different disclosure frameworks, the article addresses efforts that have been made to regulate or standardize the world's markets on a more international level. Finally, the article discusses where we should go next in the quest to create greater harmony in a truly global marketplace.

Controlling The Environmental Consequences Of Power Development In The People's Republic Of China, Homer Sun

Michigan Journal of International Law

This Note proposes a strategy to mitigate the environmental degradation resulting from China's power development. Part I introduces China's power industry - its excessive dependence on coal, its antiquated and inefficient infrastructure, its pollutive effects, and its projected expansion. Part II appraises the ways in which China's environmental laws, macroeconomic controls, and foreign investment restrictions influence the growth of power development and its corresponding effect on the environment. Part III assesses the role that governments, development banks, and international organizations can play in curbing the environmental impact of Chinese power projects. Considering the problems associated with current Chinese and international …

Securitization Of State Ownership: Chinese Securities Law, Minkang Gu, Robert C. Art

Michigan Journal of International Law

Part I of this article establishes the scope of analysis and defines the Chinese use of the term "security," which is more limited than under American law. Parts II and III briefly examine the history of Chinese securities laws and the understanding of securities by the Chinese people. Part IV focuses on the government's motivations in establishing the securities markets. Part V discusses the distinctively Chinese approach of classifying shares according to the characteristics and nationality of permitted shareholders. Part VI addresses the future development of Chinese securities markets. The conclusion reflects on the significance of western forms of securities …

English Law In The Age Of The Black Death, 1348-1381: A Transformation Of Governance And Law, Daniel B. Kosove

Michigan Law Review

A Review of English Law in the Age of the Black Death, 1348-1381: A Transformation of Governance and Law by Robert C. Palmer

Labor And The Global Economy: Four Approaches To Transnational Labor Regulation, Katherine Van Wezel Stone

Michigan Journal of International Law

This article examines the challenge to domestic labor regulation posed by the increasingly international economic and legal order. Part I analyzes the several ways in which increased global economic integration creates problems for labor. These problems include a decline in union bargaining power, a race-to-the-bottom in labor standards, and a weakening of labor's role as political actor. Part II identifies four approaches, or models, for transnational labor regulation that have emerged in the Western world in the past twenty years. These are: (1) preemptive legislation; (2) harmonization; (3) cross-border monitoring; and (4) extraterritorial jurisdiction. Part III explores the differences between …

Empowering The Russian Consumer In A Market Economy, James P. Nehf

Michigan Journal of International Law

One purpose of this article is to examine how the legislative product of a declining socialist state will benefit Russian consumers during the unusual circumstances characterizing the period of market transformation. A second purpose is to familiarize Western consumerists with the decidedly pro-consumer features of the Russian law. Part I analyzes the consumer law's provisions that elevate the legal status of consumers when they purchase goods and services. Part II examines the legislation from a different perspective - as a set of legal norms affecting the operation of consumer markets generally. Part III discusses the enforcement mechanisms established in the …