Law Commons^™

Proposal For A New Regulation Of Speculation In Sovereign Debt, Justin Vanderschuren

Fellow, Adjunct, Lecturer, and Research Scholar Works

Over the past few years, several countries have undertaken to regulate the speculation in sovereign debt pursued by so-called “vulture funds.” The various realizations and attempts present a series of loopholes that make a new regulation of this speculation advisable. A proposal for a new regulation, legally justified and precisely framed, is all the more desirable given that some legislators, in particular from the New York State Legislature, have recently taken up the issue of speculation.

Debt sustainability is the only realistic regulation benchmark. It is inconceivable to ban debt purchases on the secondary market as this would significantly impact …

The Problematic Forgotten Buyback, Yesha Yadav

Vanderbilt Law School Faculty Publications

Totaling in excess of $100 billion dollars in transactions annually, debt buybacks allow a company to repurchase bonds from investors, rewriting bargains and stripping away creditor control rights in the process. This Article shows that regulation systematically underprotects bondholders in the context of debt buybacks. It makes three points. First, bondholders confront information asymmetries that enable issuers to buy back creditor claims cheaply. Regulation imposes near negligible requirements on issuers to disclose information about the transaction. Lacking fiduciary protection, bondholder interests are vulnerable to being extinguished by issuers in the interests of promoting those of shareholders and managers. Second, buybacks …

How To Understand China's Approach To Central Bank Digital Currency?, Heng Wang

Research Collection Yong Pung How School Of Law

China's central bank digital currency (CBDC), digital yuan or e-CNY, is likely to profoundly affect the international financial system. China's CBDC is fast evolving. Understanding the influencing factors of China's CBDC will likely be crucial to explore its future direction. Major influencing factors include (i) China's perception and conception of regulation and technology, (ii) complementarity between China's preferences and CBDC development, (iii) domestic and international legitimacy, and (iv) institutional development. This paper argues that these influencing factors contribute to China's likely approach of selectively reshaping the international financial system. Given the potential wide-ranging implications of the introduction of CBDC globally, …

Interest Rates, Venture Capital, And Financial Stability, Hilary J. Allen

Articles in Law Reviews & Other Academic Journals

Following several prominent bank failures and as central banks continue to tighten interest rates to fight inflation, there is increasing interest in the relationship between monetary policy and financial stability. This Article illuminates one path through which the prolonged period of low interest rates from 2009-2021 has impacted financial stability: it traces how yield-seeking behavior in the wake of the Global Financial Crisis and Covid pandemic led to a bubble in the venture capital industry, which in turn spawned a crypto bubble as well as a run on the VC-favored Silicon Valley Bank. This Article uses this narrative to illustrate …

Globalize Me: Regulating Distributed Ledger Technology, Roee Sarel, Hadar Y. Jabotinsky, Israel Klein

Vanderbilt Journal of Transnational Law

Distributed Ledger Technology (DLT)—the technology underlying cryptocurrencies—has been identified by many as a game-changer for data storage. Although DLT can solve acute problems of trust and coor- dination whenever entities (e.g., firms, traders, or even countries) rely on a shared database, it has mostly failed to reach mass adoption out- side the context of cryptocurrencies.

A prime reason for this failure is the extreme state of regulation, which was largely absent for many years but is now pouring down via uncoordinated regulatory initiatives by different countries. Both of these extremes—under-regulation and over-regulation—are consistent with traditional concepts from law and economics. …

U.S. Cryptocurrency Regulation: A Slowly Evolving State Of Affairs, Aaron Poynton

Notre Dame Journal on Emerging Technologies

After nearly a decade and a half since the creation of the first cryptocurrency, crypto regulation in the United States is fragmented, with different measures taken at the federal and state levels, and even within and among agencies. This sluggish speed is not necessarily a surprise as government regulation has always chased rapid advancements in technology and associated consumer and market behavior changes. However, this is a precarious position for the United States--and the world--as the U.S. is a leader in the global financial community, the high concentration of crypto-based wealth, and economies’ increasingly interconnected and interdependent nature. This working …

Regulatory Sandboxes Enable Pragmatic Blockchain Regulation, Joshua Durham

Washington Journal of Law, Technology & Arts

Since blockchain technology supports digitally-native money, the centralized chokepoints that governments have traditionally targeted to regulate commerce no longer apply to our (digital) property. However, competent regulation furthers basic public policy goals and should enable responsible innovation of this promising technology. This Article discusses pragmatic policies that enable responsible innovation by cultivating regulatory expertise required to write enforceable rules. Responsible innovation is necessary because unlike the early internet, where programmers could manipulate simple colors and text on webpages, these same individuals can now create financial services applications that manipulate actual money—we are faced with an inescapable reality that more is …

From Tether To Terra: The Current Stablecoin Ecosystem And The Failure Of Regulators, Mary E. Burke

Fordham Journal of Corporate & Financial Law

The Tether controversy and Terra crash have placed stablecoins in the regulatory spotlight. Stablecoins are often portrayed as posing systemic risks to financial markets, with some pundits labelling them “the villain of the finance world.” Global regulatory bodies, namely the International Monetary Fund (IMF) and the Bank of International Settlement (BIS), and political leaders, including the Biden Administration, have all called for stablecoin regulation. These officials allege that stablecoins’ structure, combined with their exponential growth, pose a unique risk to global markets. Before the May 2022 Terra crash, government reports superficially treated stablecoins by exclusively focusing on asset-backed coins. Post …

Did The Superbowl Ad Curse Heighten Defined Contribution Plan Fiduciary Duties?: Deciphering The Legal And Ethical Landscape Of Cryptocurrency Options In 401(K)S, Lauren K. Valastro

Sturm College of Law: Faculty Scholarship

Regulating cryptocurrency’s place in America’s most popular retirement savings vehicle generates thorny legal, ethical, and social justice dilemmas. Too little regulation could hurt those at highest risk of underfunded retirement. Too much could exacerbate existing racial, ethnic, and gender inequities.

Though recent regulatory efforts suggest 401(k) administrators violate their fiduciary duty of care by offering cryptocurrency investment options to plan participants, the established fiduciary regime protects 401(k) plan participants from cryptocurrency risk while respecting their savings preferences. Yet, the current framework falls short of ethically and equitably serving all plan participants, particularly members of underserved communities — a problem largely …