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Full-Text Articles in Law
The Administrative State, Financial Regulation, And The Case For Commissions, Kathryn Judge, Dan Awrey
The Administrative State, Financial Regulation, And The Case For Commissions, Kathryn Judge, Dan Awrey
Faculty Scholarship
Administrative law is under attack, with the Supreme Court reviving, expanding, and creating doctrines that limit the authority and autonomy wielded by regulatory agencies. This anti-administrative turn is particularly alarming for financial regulation, which already faces enormous challenges stemming from the dynamism of modern finance, its growing complexity, and fundamental contestability. Yet that does not mean that defending the current regime is the optimal response. The complexity and dynamism of modern finance also undercut the efficacy of established administrative procedures. And the panoply of financial regulators with unclear and overlapping jurisdictional bounds only adds to the challenge. Both these procedural …
The Failure Of Market Efficiency, William Magnuson
The Failure Of Market Efficiency, William Magnuson
Faculty Scholarship
Recent years have witnessed the near total triumph of market efficiency as a regulatory goal. Policymakers regularly proclaim their devotion to ensuring efficient capital markets. Courts use market efficiency as a guiding light for crafting legal doctrine. And scholars have explored in great depth the mechanisms of market efficiency and the role of law in promoting it. There is strong evidence that, at least on some metrics, our capital markets are indeed more efficient than they have ever been. But the pursuit of efficiency has come at a cost. By focusing our attention narrowly on economic efficiency concerns—such as competition, …
Remutualization, Erik F. Gerding
Remutualization, Erik F. Gerding
Publications
Policymakers need to rediscover the organizational form of business entity as a tool of financial regulation. Recent and classic scholarship has produced evidence that financial institutions organized as alternative entity forms – including investment bank partnerships and banks and insurance companies organized as mutual or cooperatives – tend to take less risk, exploit customers/consumer less, or commit less misconduct compared to counterparts organized as investor-owned corporations. This article builds off the work of Hill and Painter on investment banks organized as partnerships, Hansmann on the history and economics of banks and insurance companies organized as mutuals and cooperatives, and other …
The Regulation Of Equity Index Futures, Lin (Lynn) Bai
The Regulation Of Equity Index Futures, Lin (Lynn) Bai
Faculty Articles and Other Publications
Equity index futures are one of the most actively traded derivative instruments in financial markets around the world. Advancements in trading and clearing technologies transformed the marketplace over the past two decades. Regulation drastically changed to keep pace with the market’s development. New rules have been implemented covering trading activities, risk management, market surveillance, and customer protection. Legal literature on the regulation of this important financial instrument is surprisingly antiquated. Existing papers were written decades ago and do not reflect the true metes and bounds of today’s regulatory landscape. This paper fills the void. It provides a comprehensive discussion of …
Why Financial Regulation Keeps Falling Short, Dan Awrey, Kathryn Judge
Why Financial Regulation Keeps Falling Short, Dan Awrey, Kathryn Judge
Faculty Scholarship
This article argues that there is a fundamental mismatch between the nature of finance and current approaches to financial regulation. Today’s financial system is a dynamic and complex ecosystem. For these and other reasons, policy makers and market actors regularly have only a fraction of the information that may be pertinent to decisions they are making. The processes governing financial regulation, however, implicitly assume a high degree of knowability, stability, and predictability. Through two case studies and other examples, this article examines how this mismatch undermines financial stability and other policy aims. This examination further reveals that the procedural rules …
The Impact Of The Durbin Amendment On Banks, Merchants, And Consumers, Vladimir Mukharlyamov, Natasha Sarin
The Impact Of The Durbin Amendment On Banks, Merchants, And Consumers, Vladimir Mukharlyamov, Natasha Sarin
All Faculty Scholarship
After the Great Recession, new regulatory interventions were introduced to protect consumers and reduce the costs of financial products. Some voiced concern that direct price regulation was unlikely to help consumers, because banks offset losses in one domain by increasing the prices that they charge consumers for other products. This paper studies this issue using the Durbin Amendment, which decreased the interchange fees that banks are allowed to charge merchants for processing debit transactions. Merchant interchange fees, previously averaging 2 percent of transaction value, were capped at $0.22, decreasing bank revenue by $6.5 billion annually. The objective of Durbin was …
Through The Looking Glass To A Shared Reflection: The Evolving Relationship Between Administrative Law And Financial Regulation, Gillian E. Metzger
Through The Looking Glass To A Shared Reflection: The Evolving Relationship Between Administrative Law And Financial Regulation, Gillian E. Metzger
Faculty Scholarship
Administrative law and financial regulation have an uneasy relationship today. It was not always so. Indeed, the two were closely intertwined at the nation's birth. The Treasury Department was a major hub of early federal administration, with Alexander Hamilton crafting the first iterations of federal administrative law in his oversight of revenue generation and customs collection. One hundred and fifty years later, administrative law and financial regulation were conjoined in the New Deal's creation of the modern administrative state. This time it was James Landis, Chair of the newly formed Securities and Exchange Commission (SEC) and author of the leading …
A New Framework For Eu Administration: The Financial Regulation 2002, Paul Craig
A New Framework For Eu Administration: The Financial Regulation 2002, Paul Craig
Articles by Maurer Faculty
No abstract provided.
Shareholder Enforced Market Discipline: How Much Is Too Much?, Eric J. Gouvin
Shareholder Enforced Market Discipline: How Much Is Too Much?, Eric J. Gouvin
Faculty Scholarship
This Article considers the federal banking regulation regime implemented in response to the widespread bank failures of the 1980s and early 1990s. The first section of the Article examines the moral hazard problem created by the presence of the deposit insurance scheme and the market discipline debate that has attempted to correct the moral hazard problem. The Author argues that the law has evolved to make bank holding companies the primary enforcers of market discipline. The Article’s second section examines the specific regulatory changes that have been designed to create an incentive for bank holding companies to impose discipline on …