Financial Innovation In East Asia, 2014 Seattle University School of Law
Financial Innovation In East Asia, Ross P. Buckley, Douglas W. Arner, Michael Panton
Seattle University Law Review
Finance is important for development. However, the Asian financial crisis of 1997–1998 and the global financial crisis of 2008 highlighted the serious risks associated with financial liberalization and excessive innovation. East Asia’s strong focus on economic growth has necessitated a careful balancing of the benefits of financial liberalization and innovation against the very real risks inherent in financial sector development. This Article examines the role of regulatory, legal, and institutional infrastructure in supporting both financial development and limiting the risk of financial crises. The Article then addresses a series of issues with particular developmental significance in the region ...
Culture Wars: Rate Manipulation, Institutional Corruption, And The Lost Normative Foundations Of Market Conduct Regulation, 2014 Seattle University School of Law
Culture Wars: Rate Manipulation, Institutional Corruption, And The Lost Normative Foundations Of Market Conduct Regulation, Justin O'Brien
Seattle University Law Review
The global investigations into the manipulation of the London Interbank Offered Rate (Libor) have raised significant questions about how conflicts of interest are managed for regulated entities contributing to benchmarks. An alternative framework, which brings the management of the rate process under direct regulatory supervision, is under consideration, coordinated by the International Organization of Securities Commissions taskforce. The articulation of global principles builds on a review commissioned by the British government that suggests rates calculated by submission can be reformed. This paper argues that this approach is predestined to fail, precisely because it ignores the lessons of history. In revisiting ...
The Timing And Source Of Regulation, 2014 Seattle University School of Law
The Timing And Source Of Regulation, Frank Partnoy
Seattle University Law Review
The distinction between specific concrete rules and general abstract principles has engaged legal theorists for decades. This rules–principles distinction has also become increasingly important in corporate and securities law, as well as financial market regulation. This Article adds two important variables to the rules–principles debate: timing and source. Although these two variables are relevant to legal theory generally, the specific goal here is not to address and engage the rules versus principles literature directly. Rather, the goal here is to ask whether the debate about financial market regulation might benefit from a more transparent analysis of temporal and ...
Deferred Prosecutions In The Corporate Sector: Lessons From Libor, 2014 Seattle University School of Law
Deferred Prosecutions In The Corporate Sector: Lessons From Libor, Justin O'Brien, Olivia Dixon
Seattle University Law Review
Since 2008, the global economic downturn has significantly in-creased operating pressures on major corporations. Additionally, there has been a corresponding increase in corporate tolerance for corruption, which has coincided with a marked preference by regulators in settling, rather than litigating, enforcement actions. This Article argues that the expansion of prosecutorial authority without appropriate accountability restraints is a major tactical and strategic error. It evaluates whether the mechanism can be made subject to effective oversight. It argues that the current frame-work in the United States is highly problematic, leading to settlements that generate newspaper headlines but not necessarily cultural change. It ...
Are Defined Contribution Pension Plans Fit For Purpose In Retirement?, 2014 Seattle University School of Law
Are Defined Contribution Pension Plans Fit For Purpose In Retirement?, Jeremy R. Cooper
Seattle University Law Review
This Article considers the historical basis for the shift from defined benefit plans to defined contribution plans, the structural and practical shortcomings of defined contribution plans, alternate pension models, and adjustments to existing retirement plan models that may offer a degree of protection to plan contributors. Like the United States, Australia is now realizing the limitations of a defined contribution retirement system insofar as it relates the provision of reliable retirement income for a population with increasing life expectancy. Unlike defined contribution plans, defined benefit plans provide a benefit based typically on time served and a predetermined proportion of either ...
Enhancing The Transparency Dialogue In The “Santiago Principles” For Sovereign Wealth Funds, 2014 Seattle University School of Law
Enhancing The Transparency Dialogue In The “Santiago Principles” For Sovereign Wealth Funds, Adam D. Dixon
Seattle University Law Review
The financial crisis ultimately caused Western governments to welcome sovereign wealth fund (SWF) investment as a way to put a floor under collapsing markets and to provide a set of voluntary principles that would underwrite SWFs’ claim to legitimacy in the international community. In the autumn of 2007, then U.S. Treasury Secretary Henry Paulson, in conjunction with the International Monetary Fund, convened the International Working Group of SWFs (IWG) to draft a set of generally accepted principles and practices. These principles are referred to as the “Santiago Principles.” The implicit objective of these twenty-four voluntary principles is to promote ...
Bargaining In The Shadow Of Big Data, 2014 SelectedWorks
Bargaining In The Shadow Of Big Data, Dru Stevenson, Nicholas J. Wagoner
Attorney bargaining has traditionally taken place in the shadow of trial, as litigants alter their pretrial behavior—including their willingness to negotiate a settlement—based on their forecast of the outcome at trial and associated costs. Lawyers bargaining in the shadow of trial have traditionally relied on their knowledge of precedent, intuition, and previous interactions with the presiding judge and opposing counsel to forecast trial outcomes and litigation costs. Today, however, technology for leveraging legal data is moving the practice of law into the shadow of the trends and patterns observable in aggregated litigation data. In this Article, we describe ...
Dirty Debts Sold Dirt Cheap, 2014 SelectedWorks
Dirty Debts Sold Dirt Cheap, Dalie Jimenez
This Article examines the sale and purchase of consumer debts (e.g., delinquent credit card debts) through the lens of a rare collection of contracts.† It finds that in many instances, sellers disclaim all warranties about the underlying debts sold or the information transferred, sometimes as far as specifically refusing to stand by “the accuracy or completeness of any information provided.” The Article argues that the collection of consumer debts sold through these transactions violates the Fair Debt Collection Practices Act’s prohibition against using deceptive or misleading representations in connection with the collection of a debt. After considering potential ...
Hollywood Deals: Soft Contracts For Hard Markets, Jonathan Barnett
University of Southern California Law and Economics Working Paper Series
Hollywood film studios, talent and other deal participants regularly commit to, and undertake production of, high-stakes film projects on the basis of unsigned “deal memos”, informal communications or draft agreements whose legal enforceability is uncertain. These “soft contracts” constitute a hybrid instrument that addresses a challenging transactional environment where neither formal contract nor reputation effects adequately protect parties against the holdup risk and project risk inherent to a film project. Parties negotiate the degree of contractual formality, which correlates with legal enforceability, as a proxy for allocating these risks at a transaction-cost savings relative to a fully formalized and specified ...
The Smokable Goods Tax: Crafting A Constitutional Marijuana Tax, 2014 SelectedWorks
The Smokable Goods Tax: Crafting A Constitutional Marijuana Tax, Nima H. Mohebbi, Samuel T. Greenberg
Nima H. Mohebbi
Marijuana legalization and decriminalization has become a hot policy issue. Roughly twenty U.S. states have partially legalized marijuana (generally for medicinal purposes) and two states – Colorado and Washington – have legalized it for general adult recreational use. Given the likely hyper-growth of the cannabis market in view of the possible wide-scale legalization of marijuana, states might enjoy a potential budgetary windfalls from marijuana excise taxes.
Marijuana, however, remains a federally controlled substance, the sale or use of which is subject to substantial penalties. For the states, this presents a potential problem in collecting excise taxes on marijuana – namely, if an ...
When Should Bankruptcy Be An Option (For People, Places Or Things)?, 2014 University of Pennsylvania Law School
When Should Bankruptcy Be An Option (For People, Places Or Things)?, David A. Skeel Jr.
When many people think about bankruptcy, they have a simple left-to-right spectrum of possibilities in mind. The spectrum starts with personal bankruptcy, moves next to corporations and other businesses, and then to municipalities, states, and finally countries. We assume that bankruptcy makes the most sense for individuals; that it makes a great deal of sense for corporations; that it is plausible but a little more suspect for cities; that it would be quite odd for states; and that bankruptcy is unimaginable for a country.
In this Article, I argue that the left-to-right spectrum is sensible but mistaken. After defining “bankruptcy ...
Intuitions About Contract Formation, 2014 University of Pennsylvania Law School
Intuitions About Contract Formation, Tess Wilkinson-Ryan, David A. Hoffman
Legally, much depends on the moment that a negotiation becomes a deal. Unlike torts or civil procedure or any area of public law, the laws of promissory exchange only apply to parties who have manifested their assent to be bound. Even so, the moral norms of exchange and promise are quite firmly entrenched and more broadly applicable than just legal contracts. Norms of promise-keeping and reciprocity, interpersonal courtesy, community reputation—these kinds of intangible goods have real effects on contract behavior. For this reason it is especially surprising that intuitions about formation have gotten so little attention from legal and ...
C(R)Ap And Trade: The Brave New World Of Non-Point Source Nutrient Trading And Using Lessons From Greenhouse Gas Markets To Make It Work, Victor B. Flatt
Victor B Flatt
After several decades of improvement, water quality in the United States is getting worse, and the problem is primarily caused by run-off from non-point sources, such as farms and urban development. These non-point sources have never had regulatory mandates in the Clean Water Act, and have proven very difficult to control. With little likelihood of comprehensive statutory changes, the EPA and the states that administer the Clean Water Act have looked to other regulatory means to address this problem. One of the most prominent has been the use of markets in pollution (particularly for nutrient pollution from run-off) to provide ...
Building A Framework For Governance: Retrospective Review And Rulemaking Petitions, Reeve T. Bull
Reeve T Bull
Of the various regulatory reform efforts advocated by legal scholars and politicians in recent years, perhaps none holds greater promise than retrospective review of agency regulations, whereby agencies revisit existing rules to determine whether they remain appropriate in light of changed circumstances. The Obama Administration has embraced the principles of retrospective review, issuing three executive orders on the subject, and it has trumpeted billions of dollars in economic savings resulting from those efforts. Nevertheless, numerous scholars have criticized these initiatives, contending that agencies reviewing their own regulations are unlikely to repeal or fundamentally overhaul existing rules. This article addresses the ...
Criminal Innovation And The Warrant Requirement: Reconsidering The Rights-Police Efficiency Trade-Off, Tonja Jacobi, Jonah Kind
It is routinely assumed that there is a trade-off between police efficiency and the warrant requirement. But existing analysis ignores the interaction between police investigative practices and criminal innovation. Narrowing the definition of a search or otherwise limiting the requirement for a warrant gives criminals greater incentive to innovate to avoid detection. With limited police resources to develop countermeasures, police will often be just as effective at capturing criminals when facing higher Fourth Amendment hurdles. We provide a game theoretic model that shows that when police investigation and criminal innovation are considered in a dynamic context, the police efficiency rationale ...
International Legal Control Of Domestic Administrative Action, 2014 SelectedWorks
International Legal Control Of Domestic Administrative Action, Joel P. Trachtman
Joel P Trachtman
International law increasingly is designed to constrain the regulatory activities of countries where these activities have external effects on other countries. While countries retain the right to regulate, it is a qualified right, with a number of restrictions under international trade, investment, finance, human rights, and other areas of international law. The restrictions are often nuanced: while maintaining maximum policy autonomy, countries agree to international legal rules that establish increasingly complex preconditions for national regulatory action. In some cases, preconditions are formulated so as to establish procedural, as distinguished from substantive, predicates for national action. These varying types of preconditions ...
Paying For Risk: Bankers, Compensation, And Competition, 2014 Cornell Law Library
Paying For Risk: Bankers, Compensation, And Competition, Simone M. Sepe, Charles K. Whitehead
Cornell Law Faculty Working Papers
Efforts to control bank risk address the wrong problem in the wrong way. They presume that the financial crisis was caused by CEOs who failed to supervise risk-taking employees. The responses focus on executive pay, believing that executives will bring non-executives into line—using incentives to manage risk-taking—once their own pay is regulated. What they overlook is the effect on non-executive pay of the competition for talent. Even if executive pay is regulated, and executives act in the bank’s best interests, they ...
Behavioral International Law, 2014 SelectedWorks
Behavioral International Law, Tomer Broude
Economic analysis and rational choice have in the last decade made significant inroads into the study of international law and institutions, relying upon standard assumptions of perfect rationality of states and decision-makers. This approach is inadequate, both empirically and in its tendency towards outdated formulations of political theory. This article presents an alternative behavioral approach that provides new hypotheses addressing problems in international law while introducing empirically grounded concepts of real, observed rationality. First, I address methodological objections to behavioral analysis of international law: the focus of behavioral research on the individual; the empirical foundations of behavioral economics; and behavioral ...
The Worst Test Of Truth: The "Marketplace Of Ideas" As Faulty Metaphor, 2014 SelectedWorks
The Worst Test Of Truth: The "Marketplace Of Ideas" As Faulty Metaphor, Thomas W. Joo
Thomas W Joo
In his famous dissent in Abrams v. United States, Justice Holmes proclaimed that “the best test of truth is the power of the thought to get itself accepted in the competition of the market.” This Article critiques the basic argument against speech regulation that has developed from the “marketplace of ideas” metaphor: that speech should be “free” because markets are “free,” and because free markets produce “truth.” These assertions about markets are taken for granted, but they portray markets and market regulation inaccurately; thus economic markets provide a poor analogy for the deregulation of speech.
First Amendment jurisprudence invokes the ...
The Long Quest For Legal Efficiency. On The Illusion Of A Process-Free Economic Analysis Of Law, Daniele Bertolini
In this paper I attempt to reconstruct and scrutinize the long lasting debate on economic efficiency as a legal concern, and to show that the prevailing idea of economic efficiency - which is exclusively referring to the contents of legal rules as disconnected from the features of the lawmaking process - misses the essence of the discipline. I demonstrate that conventional output-oriented approach is susceptible to the following criticisms: (1) it is affected by logical circularity and/or logical incompleteness; (2) it does not provide any guarantee of social welfare increases; (3) it does not account for the presence of losers; (4 ...