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Banking and Finance Law

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2019

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Full-Text Articles in Law

Bali Mawacara: Is A Quasi-Common Law System Developing In Balinese Customary Law?, Danial Kelly, Wayan P. Windia Dec 2019

Bali Mawacara: Is A Quasi-Common Law System Developing In Balinese Customary Law?, Danial Kelly, Wayan P. Windia

Indonesia Law Review

The Indonesian island of Bali is internationally renowned as a popular tourist destination. Tourists from around the world have been attracted to Bali’s rich and colourful displays of culture and its friendly people for many decades. Intertwined with the predominately Hindu culture that is so readily visible is the invisible customary legal system of Bali that regulates much of the daily life of the Balinese. This autochthonous legal system exists in plurality with the Indonesian state legal system. As with all legal systems, the Balinese customary law system is in a state of flux. This article will examine the foundational …


Perlindungan Hukum Nasabah Dalam Perjanjian Telemarketing Bank, Sri Lestari Poernomo Dec 2019

Perlindungan Hukum Nasabah Dalam Perjanjian Telemarketing Bank, Sri Lestari Poernomo

Jurnal Hukum & Pembangunan

Telemarketing is one of the banking products. This research is conducted to analyze the validity of the agreement that was born and the offering of banking products through telemarketing, transactions made in telemarketing activities almost entirely do not fulfill the legal agreement requirements, namely contracts because if there are elements of oversight and fraud, the Bank must be responsible if a loss occurs because the bank uses customer data to be referenced to the insurance company that works with the bank. The problem examined is how the validity of the agreement that was born from bank telemarketing activities and the …


Compliance Officers: Personal Liability, Protections, And Posture, Jennifer M. Pacella Dec 2019

Compliance Officers: Personal Liability, Protections, And Posture, Jennifer M. Pacella

Brooklyn Journal of Corporate, Financial & Commercial Law

This Symposium Article will explore the evolving nature of the regulatory and enforcement landscape as it pertains to compliance officers, specifically regarding their susceptibility to personal liability. It will examine the posture of compliance officers in three contexts: i) as a possible target for enforcement activity by regulators; ii) as a quasi-professional subject to a current regime of “non-regulation”; and iii) as an employee in need of ample whistleblower protections, each of which create implications for a compliance officer’s risk of personal liability and protections as a constituent of the organization monitored. After considering the current guidance surrounding enforcement activity …


Artificial Intelligence & Artificial Prices: Safeguarding Securities Markets From Manipulation By Non-Human Actors, Daniel W. Slemmer Dec 2019

Artificial Intelligence & Artificial Prices: Safeguarding Securities Markets From Manipulation By Non-Human Actors, Daniel W. Slemmer

Brooklyn Journal of Corporate, Financial & Commercial Law

Securities traders are currently competing to use Artificial Intelligence (A.I.) in order to make more profitable decisions in the marketplace. While A.I. provides superior abilities in recognizing market patterns, its complexity can obscure its decision-making process beyond human comprehension. Problematically, the current securities laws prohibiting manipulation of securities prices rest liability for violations on a trader’s intent. In order to prepare for A.I. market participants, both courts and regulators need to accept that human concepts of decision-making will be inadequate in regulating A.I. behavior. However, the wealth of case law in the market manipulation doctrine need not be cast aside. …


Foreign Direct Investments Into Fintech And Blockchain Technology Startups In Latin America, Y. Tatiana Clavijo, Hernán Pantaleón Dec 2019

Foreign Direct Investments Into Fintech And Blockchain Technology Startups In Latin America, Y. Tatiana Clavijo, Hernán Pantaleón

University of Miami Inter-American Law Review

Technology is changing our everyday lives at a faster rate every minute from artificial intelligence and medical advances in robotics to the upcoming self-driving cars. Every sector of our lives is being impacted, disrupted, and constantly altered by innovations, including our finances. In the developed markets, fintech, or financial technology, is the new and exciting area of product innovation for financial services. The innovations rely on the internet, blockchain technology, and the new and highly controversial digital currencies. Consequently, new digital platforms and mobile applications create new possibilities while being accessible to more people at a lower cost across borders. …


Conspiracy Allegations In The Stock Loan Market: Why Plaintiffs Should Be Seeking A Remedy In Congress And Not In Court, Danielle P. Katz Dec 2019

Conspiracy Allegations In The Stock Loan Market: Why Plaintiffs Should Be Seeking A Remedy In Congress And Not In Court, Danielle P. Katz

Et Cetera

This Article first provides a comprehensive analysis of conspiracy allegations in over-the-counter markets, focusing on the stock loan market as an exemplar.

Multiple conspiracy claims, implicating antitrust law, have been brought regarding over the counter markets since the financial crisis of 2008. The biggest banks in the country have been the center of novel complaints, new regulations, and innovative legislation in the recent years. But, despite regulation and legislation, Sherman Act litigation alleging conspiracy has endured as plaintiffs claim that big banks are conspiring to fix markets when, in fact, they are exercising economies of scale to provide unique, tailored …


Nipped In The Bud: How Legal Disparities Create Financial Growth Hurdles In The State-Sanctioned Marijuana Industry And Why Bankruptcy Courts Can Provide A Remedy, Caitlyn Cullen Nov 2019

Nipped In The Bud: How Legal Disparities Create Financial Growth Hurdles In The State-Sanctioned Marijuana Industry And Why Bankruptcy Courts Can Provide A Remedy, Caitlyn Cullen

University of Miami Law Review

A new marijuana industry has emerged in the United States in the wake of state-by-state legalization of marijuana, and entrepreneurs, investors, and other advisory services are increasingly viewing the marijuana industry as an area of legitimate business opportunity. However, potential investors have been hesitant to establish formal relationships with marijuana businesses that operate legitimately in the eyes of the state but in a cloud of legal uncertainty at the federal level because the Controlled Substances Act criminalizes marijuana. This Note identifies two economic consequences of the conflicts of state and federal law and suggests a temporary solution that would allow …


European Banking Union D: Cross-Border Resolution—Dexia Group, Rosalind Z. Wiggins, Natalia Tente, Andrew Metrick Nov 2019

European Banking Union D: Cross-Border Resolution—Dexia Group, Rosalind Z. Wiggins, Natalia Tente, Andrew Metrick

Journal of Financial Crises

In September 2008, Dexia Group, SA, the world’s largest provider of public finance, experienced a sudden liquidity crisis. In response, the governments of Belgium, France, and Luxembourg provided the company a capital infusion and credit support. In February 2010, the company adopted a European Union (EU)-approved restructuring plan that required it to scale back its businesses and cease proprietary trading. In June 2011, Dexia withdrew from the government-sponsored credit support program before its expiration date, and in July, the company announced that it had passed an EU stress test. However, just three months later, Dexia wrote down its substantial position …


European Banking Union C: Cross-Border Resolution–Fortis Group, Rosalind Z. Wiggins, Natalia Tente, Andrew Metrick Nov 2019

European Banking Union C: Cross-Border Resolution–Fortis Group, Rosalind Z. Wiggins, Natalia Tente, Andrew Metrick

Journal of Financial Crises

In August 2007, Fortis Group, Belgium’s largest bank, acquired the Dutch operations of ABN AMRO, becoming the fifth largest bank in Europe. Despite its size and its significant operations in the Benelux countries, Fortis struggled to integrate ABN AMRO. Fortis’s situation worsened with the crash of the US subprime market, which impacted its subprime mortgage portfolio. By July 2008, Fortis’s CEO had stepped down, its stock had lost 70% of its value, and it was on the verge of collapse due to a severe liquidity crisis. The governments of Belgium, Luxembourg, and the Netherlands quickly came together and agreed to …


European Banking Union B: The Single Resolution Mechanism, Rosalind Z. Wiggins, Michael Wedow, Andrew Metrick Nov 2019

European Banking Union B: The Single Resolution Mechanism, Rosalind Z. Wiggins, Michael Wedow, Andrew Metrick

Journal of Financial Crises

The options available to European governments to respond to a multinational bank in financial trouble have been severely limited since each country has its own unique laws and authority applicable to banks operating within its borders. The Bank Recovery & Resolution Directive (BRRD), which was adopted in 2013 and scheduled to go into effect January 2015, harmonizes rules across EU countries for how to restructure and resolve failing banks. However, the directive would maintain the existing system of individual national resolution authorities and resolution funds. To better secure the Eurozone banks and to compliment the Single Supervisory Mechanism, which was …


European Banking Union A: The Single Supervisory Mechanism, Rosalind Z. Wiggins, Michael Wedow, Andrew Metrick Nov 2019

European Banking Union A: The Single Supervisory Mechanism, Rosalind Z. Wiggins, Michael Wedow, Andrew Metrick

Journal of Financial Crises

At the peak of the Global Financial Crisis in fall 2008, each of the 27 member states in the European Union (EU) set many of its own banking rules and had its own bank regulators and supervisors. The crisis made the shortcomings of this decentralized approach obvious, and since its formation in January 2011, the European Banking Authority (EBA) has been developing a “Single Rulebook” that will harmonize banking rules across the EU countries. In June 2012, European leaders went even further, committing to a banking union that would better coordinate supervision of banks in the then 18-country Eurozone. A …


European Central Bank Tools And Policy Actions B: Asset Purchase Programs, Chase P. Ross, Rosalind Z. Wiggins, Andrew Metrick Nov 2019

European Central Bank Tools And Policy Actions B: Asset Purchase Programs, Chase P. Ross, Rosalind Z. Wiggins, Andrew Metrick

Journal of Financial Crises

Beginning in August 2007, the European Central Bank (ECB) used standard and non-standard monetary policies as the global financial markets progressed from initial turmoil to a widespread sovereign debt crisis. This case describes the key features of the ECB’s asset purchase programs throughout the Global Financial Crisis and subsequent European sovereign debt crisis. These programs include the Covered Bond Purchase Programs (CBPP1, CBPP2, CBPP3), Securities Markets Program (SMP), Outright Monetary Transactions (OMT), Asset-backed Securities Purchase Program (ABSPP) and the Public Sector Purchase Program (PSPP).

In combating the crises, the ECB designed various innovative programs which it successively employed as the …


Ireland And Iceland In Crisis C: Iceland’S Landsbanki Icesave, Arwin G. Zeissler, Thomas Piontek, Andrew Metrick Nov 2019

Ireland And Iceland In Crisis C: Iceland’S Landsbanki Icesave, Arwin G. Zeissler, Thomas Piontek, Andrew Metrick

Journal of Financial Crises

At year-end 2005, almost all of the total assets of Iceland’s banking system were concentrated in just three banks (Glitnir, Kaupthing, and Landsbanki). These banks were criticized by certain financial analysts in early 2006 for being overly dependent on wholesale funding, much of it short-term, that could easily disappear if creditors’ confidence in these banks faltered for any reason. Landsbanki, followed later by Kaupthing and then Glitnir, responded to this criticism and replaced part of their wholesale funding by using online accounts to gather deposits from individuals across Europe. In Landsbanki’s case, these new deposits were marketed under the name …


Ireland And Iceland In Crisis B: Decreasing Loan Loss Provisions In Ireland, Arwin G. Zeissler, Andrew Metrick Nov 2019

Ireland And Iceland In Crisis B: Decreasing Loan Loss Provisions In Ireland, Arwin G. Zeissler, Andrew Metrick

Journal of Financial Crises

All public companies in the European Union, including Ireland’s major banks, were required to adopt IAS 39 for their annual accounting periods beginning on or after January 1, 2005. Under the “incurred loss” model of IAS 39, banks could set aside reserves for loan losses only when objective evidence existed that a loan was impaired, not in anticipation of future losses. As a result, Irish banks saw their aggregate reserve for bad loans drop from 1.2% of loan balances at the end of 2000 to only 0.4% by 2006-07, just before the collapse of the banking industry caused loan losses …


Ireland And Iceland In Crisis A: Increasing Risk In Ireland, Arwin G. Zeissler, Karen Braun-Munzinger, Andrew Metrick Nov 2019

Ireland And Iceland In Crisis A: Increasing Risk In Ireland, Arwin G. Zeissler, Karen Braun-Munzinger, Andrew Metrick

Journal of Financial Crises

Ireland went from being the poorest member of the European Economic Community in 1973 to enjoying the second highest per-capita income among European countries by 2007. Healthy growth in the 1990s eventually gave way to a concentrated boom in property-related lending in the 2000s. The growth in the aggregate loan balances of Ireland’s six major banks greatly exceeded the growth in gross domestic product (GDP); as a result, bank loan balances grew from 1.1 times GDP in 2000 to over 2.0 times GDP by 2007. Given the small size of the domestic retail depositor base, the Irish banks increasingly funded …


Making Money Safe, John Crawford Nov 2019

Making Money Safe, John Crawford

Notre Dame Law Review Reflection

Providing better options to hold money safely is desirable and feasible; failure to do so is a serious but fixable flaw in the legal architecture of money and payments in the United States. There have been a handful of proposals to mitigate this problem. The Federal Reserve (the Fed), however, is currently resisting an attempt to contribute to this effort. The project involves a new bank called “TNB USA Inc.” (TNB), which proposes to hold as its sole investment asset a reserve account at the Fed. (One of the Fed’s principal functions is to serve as a banks’ bank, providing …


Artificial Intelligence, Machine Learning, And Bias In Finance: Toward Responsible Innovation, Kristin Johnson, Frank Pasquale, Jennifer Chapman Nov 2019

Artificial Intelligence, Machine Learning, And Bias In Finance: Toward Responsible Innovation, Kristin Johnson, Frank Pasquale, Jennifer Chapman

Fordham Law Review

According to some futurists, financial markets’ automation will substitute increasingly sophisticated, objective, analytical, model-based assessments of, for example, a borrower’s creditworthiness for direct human evaluations irrevocably tainted by bias and subject to the cognitive limits of the human brain. However, even if they do occur, such advances may violate other legal principles.


Artificial Intelligence, Finance, And The Law, Tom C.W. Lin Nov 2019

Artificial Intelligence, Finance, And The Law, Tom C.W. Lin

Fordham Law Review

Artificial intelligence is an existential component of modern finance. The progress and promise realized and presented by artificial intelligence in finance has been thus far remarkable. It has made finance cheaper, faster, larger, more accessible, more profitable, and more efficient in many ways. Yet for all the significant progress and promise made possible by financial artificial intelligence, it also presents serious risks and limitations. This Article offers a study of those risks and limitations—the ways artificial intelligence and misunderstandings of it can harm and hinder law, finance, and society. It provides a broad examination of inherent and structural risks and …


Unlimited Liability For Banks: Deposits As Fraudulent Transfers, Katherine Zampas Nov 2019

Unlimited Liability For Banks: Deposits As Fraudulent Transfers, Katherine Zampas

St. Mary's Law Journal

One of a trustee’s most valuable resources in bankruptcy proceedings is his avoidance powers. A trustee is charged with the duty to recover and recapture any property wrongfully removed from the estate by way of fraudulent transfer or preference. In some cases, a trustee has attempted to treat a debtor’s deposit into a bank account as a transfer, rendering it subject to his avoidance powers. Such a result will leave banks collaterally responsible as a transferee for a debtor’s conduct despite their lack of culpability and control over the funds.

The definition of transfer within the Bankruptcy Code is comprehensive …


Crashing The Boards: A Comparative Analysis Of The Boxing Out Of Women On Boards In The United States And Canada, Diana C. Nicholls Mutter Oct 2019

Crashing The Boards: A Comparative Analysis Of The Boxing Out Of Women On Boards In The United States And Canada, Diana C. Nicholls Mutter

The Journal of Business, Entrepreneurship & the Law

This paper will first provide a critical, comparative look at the Canadian and the federal American responses to the under-representation of women on boards of large, publicly traded corporations. There will be a discussion about the competing conceptions which emerge in addressing the regulation of women on boards in the United States and Canada and why each jurisdiction implemented its policy when it did. The conceptions arising out of questions about under-representation of women on boards tend to fall within two categories: business case rationales and normative rationales. Given the competing conceptions of this issue, this paper will attempt to …


Direct Listing: How Spotify Is Streaming On The Nyse And Why The Sec Should Press Play, Cody L. Lipke Oct 2019

Direct Listing: How Spotify Is Streaming On The Nyse And Why The Sec Should Press Play, Cody L. Lipke

The Journal of Business, Entrepreneurship & the Law

This Note proposes that given Spotify’s successful launch on the NYSE, direct listings will become increasingly popular—primarily for start-ups but also as an exit strategy for VC and PE firms in their nonpublic investments. Part II of this Note will discuss the process of “going public” via an IPO or a direct listing. Part III will use Spotify as an illustrative example of the direct listing process. Part IV will consider the advantages and disadvantages of direct listing. Part V will conclude that the Securities and Exchange Commission (SEC or the Commission) should embrace the direct listing process and will …


Marijuana’S Continuing Illegality And Investors’ Securities Fraud Problem: The Doctrines Of Unclean Hands And In Pari Delicto, Casey W. Baker Oct 2019

Marijuana’S Continuing Illegality And Investors’ Securities Fraud Problem: The Doctrines Of Unclean Hands And In Pari Delicto, Casey W. Baker

The Journal of Business, Entrepreneurship & the Law

Marijuana-related businesses have blossomed into an industry with an estimated total market value of $7.2 billion in 2016, with annual growth projected at 17%. Industry surveys report that 62% of marijuana-related businesses have offered equity stakes to investors and approximately one-half of marijuana-related businesses planned to actively seek investment funding in 2017. Along with the investment opportunity comes heightened fraud risk, with regulators cautioning investors against investment due to the lack of accurate and publicly-available information. Also, despite state-level decriminalization, marijuana possession, sale, and distribution continues to be a crime under federal law. The criminal nature of the marijuana industry …


Behavioural Economics And The Non-Frustration Rule: Accounting For Bias, Matthew Cole Oct 2019

Behavioural Economics And The Non-Frustration Rule: Accounting For Bias, Matthew Cole

The Journal of Business, Entrepreneurship & the Law

The purpose of this paper is to argue how reforming the UK takeover and merger rules can lead to greater long-term investment by UK firms, while causing commensurate growth in productivity without hindering overseas investment or entrenching inefficient management.


Public Or Private Venture Capital?, Darian M. Ibrahim Oct 2019

Public Or Private Venture Capital?, Darian M. Ibrahim

Washington Law Review

The United States has an unparalled entrepreneurial ecosystem. Silicon Valley startups commercialize cutting-edge science, create plentiful jobs, and spur economic growth. Without angel investors and venture capital funds (VCs) willing to gamble on these high-risk, high-tech companies, none of this would be possible. From a law-and-economics perspective, startup investing is incredibly risky. Information asymmetry and agency costs abound. In the United States, angels and VCs successfully mitigate these problems through private ordering and informal means. Countries without the robust private venture capital system that exists in the United States have attempted to fund startups publicly by creating junior stock exchanges …


Regulating Retirement: Understanding The Impact Of New Best Interest And Fiduciary Standards On Retail Investors, Michael Lichtmacher Oct 2019

Regulating Retirement: Understanding The Impact Of New Best Interest And Fiduciary Standards On Retail Investors, Michael Lichtmacher

St. Mary's Law Journal

Abstract forthcoming


Accredited Investors: A Need For Increased Protection In Private Offerings, Christopher R. Zimmerman Oct 2019

Accredited Investors: A Need For Increased Protection In Private Offerings, Christopher R. Zimmerman

Northwestern University Law Review

On June 19, 2019, the SEC released a report examining, in part, the adequacy of the accredited investor definition contained within Regulation D of the Securities Act of 1933 and soliciting public comment on potential changes to that definition. This Note argues that the current accredited investor definition, which determines who may invest in a private offering, does not adequately protect retail investors. Implemented in 1982 with fixed wealth requirements to qualify, the accredited investor definition has never been significantly revised, despite four decades of inflation that dramatically increased the percentage of households who meet the qualifications of an “accredited …


Tinjauan Yuridis Pertanggungjawaban Hukum Kartu Kredit Pemerintah Di Indonesia, Shandy Aditya Pratama, Abdul Salam Sep 2019

Tinjauan Yuridis Pertanggungjawaban Hukum Kartu Kredit Pemerintah Di Indonesia, Shandy Aditya Pratama, Abdul Salam

Jurnal Hukum & Pembangunan

Government credit cards are new products whose applications are currently being piloted by the Directorate General of State Treasury to a number of work units and government institutions. This credit card is intended for government employees as a means of payment in order to use inventory money. Based on the Regulation of the Director General of Treasury No. PER-17/PB/2017, sanctions imposed on misuse of government credit cards are only by giving a warning letter and revocation of the credit card. By examining the elements of legal liability, this paper shows what sanctions can actually be imposed for misuse of government …


Table Of Contents, Seattle University Law Review Sep 2019

Table Of Contents, Seattle University Law Review

Seattle University Law Review

No abstract provided.


Jpmorgan Chase London Whale H: Cross-Border Regulation, Arwin G. Zeissler, Andrew Metrick Aug 2019

Jpmorgan Chase London Whale H: Cross-Border Regulation, Arwin G. Zeissler, Andrew Metrick

Journal of Financial Crises

As a global financial service provider, JPMorgan Chase (JPM) is supervised by banking regulatory agencies in different countries. Bruno Iksil, the derivatives trader primarily responsible for the $6 billion trading loss in 2012, was based in JPM’s London office. This office was regulated both by the Office of the Comptroller of the Currency (OCC) of the United States (US) and by the Financial Services Authority (FSA), which served as the sole regulator of all financial services in the United Kingdom (UK). Banking regulators in the US and the UK have entered into agreements with one another to define basic parameters …


Jpmorgan Chase London Whale G: Hedging Versus Proprietary Trading, Arwin G. Zeissler, Andrew Metrick Aug 2019

Jpmorgan Chase London Whale G: Hedging Versus Proprietary Trading, Arwin G. Zeissler, Andrew Metrick

Journal of Financial Crises

In December 2013, the primary United States financial regulatory agencies jointly adopted final rules to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is often referred to as the “Volcker Rule”. Section 619 prohibits banks from engaging in activities considered to be particularly risky, including proprietary trading and owning hedge funds or private equity funds. Banking regulators designed the final rule against proprietary trading in part to prevent losses like the $6 billion London Whale loss that took place in 2012 at JPMorgan Chase. Given the controversial nature of the Volcker Rule, it is …