Law Commons^™

Irs's Recent Uncertain Tax Positions Initiative: A Tangle Of Accounting, Tax And Privilege Issues, 9 Depaul Bus. & Comm. L.J. 401 (2011), Kathryn J. Kennedy

Kathryn J. Kennedy

Given the extremely limited source of resources available to the IRS in recent years, it's not surprising that it is exploring all sorts of avenues to increase its efficiency, particularly relying on corporate taxpayers to self report questionable tax positions. Under the banner of "corporate governance" and "transparency," the Service issued a series of proposals in 2010 requiring disclosure of uncertain tax positions ("UTPs") by corporate taxpayers. The Service essentially piggybacked on the recently imposed 2006 audit requirements that reserves be posted for contingent tax liabilities (i.e., tax positions that could later not be sustained, and therefore had to be …

Survey Of Illinois Law: Real Estate Finance, 16 S. Ill. U. L.J. 999 (1992), Celeste M. Hammond

Celeste M. Hammond

No abstract provided.

The Global Subprime Crisis As Explained By The Contrast Between American Contracts Law And Civil Law Countries' Laws, Practices And Expectations In Real Estate Transactions: How The Lack Of Informed Consent And The Absence Of The Civil Law Notary In The United States Contribute To The Global Crisis In Subprime Mortgage Investments, 11 J. Int'l Bus. & L. 133 (2012), Celeste M. Hammond, Ilaria Landini

Celeste M. Hammond

No abstract provided.

The Free Movement Of Capital In Europe: Is The European Court Of Justice Living Up To Its Framers' Intent And Setting An Example For The World?, Jarrod Tudor

Jarrod Tudor

The benefits to free movement of international financial flows are numerous but include an efficient asset market and the opportunity for economic growth and development for countries engaged in an agreement allowing for such freedom. The free movement of capital is one of the four pillars of the Treaty on the Function of the European Union (TFEU) along with the free movement of goods, services, and labor. Article 63 of the TFEU prohibits limitations on the free movement of capital while Article 65 of the TFEU allows for some exceptions. Not only does the free movement of capital doctrine suppose …

Discriminatory Internal Taxation In The European Union: The Power Of The European Court Of Justice To Limit The Tax Sovereignty Of Member-States Under Article 110 Of The Tfeu, Jarrod Tudor

Jarrod Tudor

Protectionism can come in a variety of methods including the use of internal taxation policies that discriminate against imports making those imports more expensive on the domestic market and thus favoring domestically-produced goods. Discriminatory taxation policies have been developed by member-states to mask protectionism by distinguishing products based on import status, product similarity, product life cycle, consumption, tax collection practices, transportation charges, and state aid. The Framers of the Treaty on the Functioning of the European Union (TFEU) wrote Article 110 with the objective in mind to prohibit internal taxation policies from discriminating against goods in made in other member-states. …

What Loss Mitigation Taught Us About Housing Finance Reform, Patricia Mccoy

Patricia A. McCoy

This blog post describes the implications of the recent US loss mitigation experience for housing reform.

Creditors' Rights Against Participants In A Leveraged Buyout, Emily Sherwin

Emily L Sherwin

No abstract provided.

Globalization In Financial Services - What Role For Gats?, Chantal Thomas

Chantal Thomas

No abstract provided.

International Debt Forgiveness And Global Poverty Reduction, Chantal Thomas

Chantal Thomas

No abstract provided.

Creditors And Debt Governance, Charles K. Whitehead

Charles K Whitehead

This chapter from the book Research Handbook on the Economics of Corporate Law (Claire Hill & Brett McDonnell, eds.), provides an introduction to the law and economic theory relating to creditors and debt governance. The chapter begins with a look at the traditional role of debt, focusing on the impact of debt on corporate governance and, in particular, the effect of an illiquid credit market on creditors’ reliance on covenants and monitoring. It then turns to changes in the private credit market and their effect on lending structure. Greater liquidity raises its own set of agency costs. In response, loans …

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

Charles K Whitehead

This Article proposes a new approach to analyzing state compliance with international obligations, positing that increased interaction among the world's regulators has reinforced norms within cross-border regulatory networks, influencing the actions of senior regulators who are network members and, in turn, affecting levels of state compliance. Network norms help define what state actions constitute signals and the meanings of those signals. Certain actions, such as implementing a substantive network standard, may be considered a concrete expression of an abstract network norm. States that fail to implement that standard risk failing to send the right signal, potentially incurring significant network sanctions. …

The Volcker Rule And Evolving Financial Markets, Charles K. Whitehead

Charles K Whitehead

The Volcker Rule prohibits proprietary trading by banking entities - in effect, reintroducing to the financial markets a substantial portion of the Glass-Steagall Act’s static divide between banks and securities firms. This Article argues that the Glass-Steagall model is a fixture of the past - a financial Maginot Line within an evolving financial system. To be effective, new financial regulation must reflect new relationships in the marketplace. For the Volcker Rule, those relationships include a growing reliance by banks on new market participants to conduct traditional banking functions. Proprietary trading has moved to less-regulated businesses, in many cases, to hedge …

The Evolution Of Debt: Covenants, The Credit Market, And Corporate Governance, Charles K. Whitehead

Charles K Whitehead

No abstract provided.

How Deregulating Derivatives Led To Disaster, And Why Re-Regulating Them Can Prevent Another, Lynn A. Stout

Lynn A. Stout

When credit markets froze up in the fall of 2008, many economists pronounced the crisis both inexplicable and unforeseeable. That’s because they were economists, not lawyers. Lawyers who specialize in financial regulation, and especially the small cadre who specialize in derivatives regulation, understood what went wrong. (Some even predicted it.) That’s because the roots of the catastrophe lay not in changes in the markets, but changes in the law. Perhaps the most important of those changes was the U.S. Congress’s decision to deregulate financial derivatives with the Commodity Futures Modernization Act (CFMA) of 2000. Prior to 2000, off-exchange derivatives contracts …

Derivatives And The Legal Origin Of The 2008 Credit Crisis, Lynn A. Stout

Lynn A. Stout

Experts still debate what caused the credit crisis of 2008. This Article argues that dubious honor belongs, first and foremost, to a little-known statute called the Commodities Futures Modernization Act of 2000 (CFMA). Put simply, the credit crisis was not primarily due to changes in the markets; it was due to changes in the law. In particular, the crisis was the direct and foreseeable (and in fact foreseen by the author and others) consequence of the CFMA’s sudden and wholesale removal of centuries-old legal constraints on speculative trading in over-the-counter (OTC) derivatives. Derivative contracts are probabilistic bets on future events. …

Regulate Otc Derivatives By Deregulating Them, Lynn A. Stout

Lynn A. Stout

When credit markets froze up in the fall of 2008, many economists pronounced the crisis inexplicable and unforeseeable. Lawyers who specialize in financial regulation, and especially the small cadre who specialize in derivatives regulation, knew better.That's because the roots of the catastrophe lay not in changes in the markets, but changes in the law. In particular, the credit crisis can be traced to Congress's 2000 passage of the Commodity Futures Modernization Act, which radically altered the traditional legal approach to financial derivatives. This shift in the legal treatment of financial derivatives has brought the banking system to its knees. The …

How Efficient Markets Undervalue Stocks: Capm And Ecmh Under Conditions Of Uncertainty And Disagreement, Lynn A. Stout

Lynn A. Stout

No abstract provided.

Betting The Bank: How Derivatives Trading Under Conditions Of Uncertainty Can Increase Risks And Erode Returns In Financial Markets, Lynn A. Stout

Lynn A. Stout

On April 12, 1994, Procter & Gamble Co. announced that it had incurred pre-tax losses of $157 million from trading in leveraged interest rate swaps, a form of financial derivative. At the time that figure seemed enormous. Yet within a year, Procter & Gamble's misfortune had been overshadowed by that of Orange County, a wealthy California enclave that lost an estimated $2.5 billion of its investment fund as a result of dealings in reverse-repurchase agreements, inverse floaters, and other arcane instruments. Recent months have seen further losses by investment funds, government entities, and even colleges and Native American tribes. Perhaps …

The Mechanisms Of Market Inefficiency: An Introduction To The New Finance, Lynn A. Stout

Lynn A. Stout

During the 1970s and early 1980s, the Efficient Capital Market Hypothesis (ECMH) became one of the most widely-accepted and influential ideas in finance economics. More recently, however, the idea of market efficiency has fallen into disrepute as a result of market events and growing empirical evidence of inefficiencies. This essay argues that the weaknesses of the efficient market theory are, and were, apparent from a careful inspection of its initial premises, including the presumptions of homogeneous investor expectations, effective arbitrage, and investor rationality. By the same token, a wide range of market phenomena inconsistent with the ECHM can be explained …

Regulate Otc Derivatives By Deregulating Them: Response To Comments, Lynn A. Stout

Lynn A. Stout

Response to comments by Jean Helwege, Peter Wallison, and Craig Pirrong on the author's article, "Regulate OTC Derivatives By Deregulating Them." Article predates the author's affiliation with Cornell Law School.

How Do Macau And Brazil Use "Eletronic Payment" To Improve Chinese-Lusophone Business Relations? - China-Brazil Relations And Macau, Claudia Ribeiro Pereira Nunes

Claudia Ribeiro Pereira Nunes

Macau's position as a privileged place in the connection between the People’s Republic of China and the Portuguese-speaking countries opens a space for the creation of entities in these countries as a way to facilitate, and even encourage, international financial relations; particularly among Brazil, the Pearl River Delta (Macau and Hong Kong) and the People’s Republic of China. This paper highlights the various challenges of electronic payment, also known as payment by securities receivables, and examines the comparative perspective of Brazil-Macau. It is necessary to investigate two research subjects: (i) Brazilian Law’s use of electronic payment from Brazil to China; …

Liquidity, Systemic Risk, And The Bankruptcy Treatment Of Financial Contracts, Riz Mokal

Riz Mokal

Systemic Risk Oversight And The Shifting Balance Of State And Federal Authority Over Insurance

Patricia A. McCoy

Banks, Break-Ins, And Bad Actors In Mortgage Foreclosure, Christopher K. Odinet

Christopher K. Odinet

Super-Liens To The Rescue? A Case Against Special Districts In Real Estate Finance, Christopher K. Odinet

Christopher K. Odinet

Controles De Câmbio No Brasil: Teoria E Prática, Bruno Meyerhof Salama

Bruno Meyerhof Salama