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Full-Text Articles in Law
The Mess At Morgan: Risk, Incentives And Shareholder Empowerment, Jill E. Fisch
The Mess At Morgan: Risk, Incentives And Shareholder Empowerment, Jill E. Fisch
All Faculty Scholarship
The financial crisis of 2008 focused increasing attention on corporate America and, in particular, the risk-taking behavior of large financial institutions. A growing appreciation of the “public” nature of the corporation resulted in a substantial number of high profile enforcement actions. In addition, demands for greater accountability led policymakers to attempt to harness the corporation’s internal decision-making structure, in the name of improved corporate governance, to further the interest of non-shareholder stakeholders. Dodd-Frank’s advisory vote on executive compensation is an example.
This essay argues that the effort to employ shareholders as agents of public values and, thereby, to inculcate corporate …
Excessive Corporate Risk-Taking And The Decline Of Personal Blame, Steven L. Schwarcz
Excessive Corporate Risk-Taking And The Decline Of Personal Blame, Steven L. Schwarcz
Faculty Scholarship
Government agencies and prosecutors are being criticized for seeking so few indictments against individuals in the wake of the 2008-09 financial crisis and its resulting banking failures. This article analyzes why — contrary to a longstanding historical trend — personal liability may be on the decline, and whether agencies and prosecutors should be doing more. The analysis confronts fundamental policy questions concerning changing corporate and social norms. The public and the media perceive the crisis’s harm as a “wrong” caused by excessive risk-taking. But that view can be too simplistic, ignoring the reality that firms must take greater risks to …
Corporate Risk-Taking And The Decline Of Personal Blame, Steven L. Schwarcz
Corporate Risk-Taking And The Decline Of Personal Blame, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.
Derivatives And Collateral: Balancing Remedies And Systemic Risk, Steven L. Schwarcz
Derivatives And Collateral: Balancing Remedies And Systemic Risk, Steven L. Schwarcz
Faculty Scholarship
U.S. bankruptcy law grants special rights and immunities to creditors in derivatives transactions, including virtually unlimited enforcement rights. This Article examines whether exempting those transactions from bankruptcy’s automatic stay, including the stay of foreclosure actions against collateral, is necessary or appropriate in order to minimize systemic risk.
Keynote Reflections: The Public Governance Duty, Steven L. Schwarcz
Keynote Reflections: The Public Governance Duty, Steven L. Schwarcz
Faculty Scholarship
Firms must take ever greater risks to try to innovate and create value in our increasingly competitive and complex global economy. Corporate governance law generally delegates control over excessive risk-taking to the firm’s investors, principally its risk-seeking shareholders. But this does not cover the type of risk-taking that led to the global financial crisis and that is becoming ever more common - risk-taking that could have systemic consequences to the financial system. I argue for a “public governance duty,” requiring managers of systemically important firms to assess the impact of risk-taking on the public as well as on investors, and …