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Fenceposts Without A Fence, Katherine Di Lucido, Nicholas Kean Tabor, Jeffery Zhang
Fenceposts Without A Fence, Katherine Di Lucido, Nicholas Kean Tabor, Jeffery Zhang
Law & Economics Working Papers
Banking organizations in the United States have long been subject to two broad categories of regulatory requirements. The first is permissive: a “positive” grant of rights and privileges, typically via a charter for a corporate entity, to engage in the business of banking. The second is restrictive: a “negative” set of conditions on those rights and privileges, limiting conduct and imposing a program of oversight and enforcement, by which the holder of that charter must abide. Together, these requirements form a legal cordon, or “regulatory perimeter,” around the U.S. banking sector.
The regulatory perimeter figures prominently in several ongoing policy …