Law Commons^™

Title Insurance: One Aspect To Consider In Land Reform In Ghana, Kweku Darfoor

Kweku Darfoor

This paper analyzes the land administration policies in Ghana to determine what the impact on the real estate sector has been. Additionally, this paper will briefly analyze title insurance in the United States market and assesses if this same insurance scheme could be implemented in the nation of Ghana to develop a robust real estate sector. Moreover, this paper illustrates how the current regulatory policies in Ghana provide insufficient protection for investors in the real property market, thereby increasing the transaction costs, reducing efficiency, and driving potential investors away from the market because of insecurity in the real estate sector.

Cleaning Up The Refuse From A Financial Crisis: The Case For A Resolution Management Corporation, James Thomson

James B Thomson

Systemic banking and financial crises invariably result in the transfer of a large volume of distressed financial assets into the hands of the government, which must later dispose of them. The fiscal and economic costs of the crisis and the speed of recovery depend on how effectively the government’s salvage operations can re-privatize these assets. To maximize the operations’ effectiveness, I propose that the government create a temporary resolution management corporation. Drawing on Kane’s (1990) asset-salvage principles, as well as the U.S. experience with special-purpose entities for managing and disposing of assets stripped from distressed financial firms’ balance sheets, I …

Is It Greek Or Déjà Vu All Over Again?: Neoliberalism, And Winners And Losers Of International Debt Crises, Tayyab Mahmud

Tayyab Mahmud

The global financial meltdown and the Great Recession of 2007-09 have brought into sharp relief the uneven distribution of gain and pain in economic crises. The 2009-10 debt crisis of Greece has resulted in a windfall for financial institutions at the expense of tax-payers, a rollback of welfare systems, and impoverishment of the working classes. This result is in tune with a pattern evidenced by the ubiquitous international debt crises of the last three decades, including the Latin American crisis of the 1980s, and the Asian crisis of 1990s. The recurrent international debt crises of the last three decades and …

The Role Of Derivatives In The Financial Crisis – Testimony Before The Financial Crisis Inquiry Commission, June 30, 2010, Michael Greenberger

Michael Greenberger

It is now almost universally accepted that the unregulated multi-trillion dollar OTC CDS market helped foment a mortgage crisis, then a credit crisis, and finally a ―once-in-a-century systemic financial crisis that, but for huge U.S. taxpayer interventions, would have in the fall of 2008 led the world economy into a devastating Depression. Before explaining below the manner in which credit default swaps fomented this crisis, it worth citing in the margin those many economists, regulators, market observers, and financial columnists who have described the central role unregulated CDS played in the crisis. Even those once skeptical of arguments about the …

The Financial Reform Act: Will It Succeed In Reversing The Causes Of The Subprime Crisis And Prevent Future Crises?, Charles W. Murdock

Charles W. Murdock

Summary: The Financial Reform Act: Will It Succeed in Reversing the Causes of the Subprime Crisis and Prevent Future Crises? By: Professor Charles W. Murdock

The current financial crisis, which could have plunged the world into a financial abyss similar to the Great Depression, is far from resolved. The financial institutions, which this article asserts caused the crisis, have returned to profitability and have paid billions of dollars in bonuses, while ordinary Americans have borne the brunt of the meltdown, with formal unemployment hanging around the 10% mark. This has caused some to comment that profits have been privatized and …

Rhetorical Federalism: The Role Of State Resistance In Health Care Decisionmaking, Elizabeth Leonard

Elizabeth A. Weeks

This Article makes the affirmative case for the widespread trend of state resistance to the recently enacted, comprehensive federal health reform law, the Patient Protection and Affordable Care Act of 2010, or ACA. A significant number of states have engaged in various forms of objection to the new federal laws, including filing lawsuits against the federal government and enacting state laws providing that ACA will not apply to residents of the state. This Article identifies reasons why those actions should not be disregarded simply as Tea Party antics or election-year gamesmanship but instead should be considered valuable to the health …

Good Deficits: Protecting The Public Interest From Deficit Hysteria, Neil H. Buchanan

Neil H. Buchanan

President Obama has come under increasingly fierce criticism for the size of the federal budget deficit, as both Democratic and Republican politicians loudly proclaim that federal spending should be cut. This article explains why such anti-deficit fervor is misguided and simplistic, and why, perhaps counter-intuitively, cutting government spending can hurt the country, rather than help it, in both the short run and the long run.

In the short run, cutting deficit spending can be disastrous to the economy, especially if the economy is already in decline. In addition, because the federal budget fails to separate spending that provides long-term benefits …

Consumer Protection Initiatives In The Eu Mortgage Market: A Behavioral Economics Based Critique And Proposal, Debra P. Stark, Jessica M. Choplin

Debra Pogrund Stark

This article critiques the Commission of the European Union's recent consumer protection initiatives for the EU mortgage market focusing on the revised form of disclosures that the Commission appears poised to mandate in a Directive, providing suggested reforms to this form to make it more effective and proposing four additional consumer protections to empower EU consumers to make wise home loan decisions. The article argues that these additional consumer protections are a necessary condtion to creating the integrated EU mortgage market (with more cross border home loans) that the Commission desires.

Book Review: Law And Happiness, Jeffrey L. Harrison

Jeffrey L Harrison

There has been a huge surge in writing about happiness and law. Part of the rationale for the interest in happiness is that it is a potential substitute for conventional notions of efficiency. Every conventional efficiency-oriented standard is based on expectations that one will be better off. For example, demand is based on willingness to pay but not on the outcome of the actual purchase. Happiness, on the other hand, is about how things turn out. Indeed, the importance of a topic is evident when two well-published and eminent law professors present a book of readings on the topic. Law …

From The Schoolhouse To The Poorhouse: The Credit Card Act's Failure To Adequately Protect Gen Y Consumers, Eboni Nelson

Eboni S Nelson

Whether through personal experiences or through the experiences of our friends and family, most, if not all, of us are all too familiar with the credit card industry’s unrelenting attempts to saddle young, naïve college students with debt that they cannot afford to repay. Students thoughtlessly apply for and use credit cards without considering the negative effects credit card debt can have on their academic, personal, and financial wellbeing. In May 2009, Congress attempted to address the pervasive problem of young consumer indebtedness by passing the Credit Card Accountability Responsibility and Disclosure Act of 2009. While this Article recognizes and …

Disintermediating Avarice: A Legal Framework For Commercially Sustainable Microfinance, Steven L. Schwarcz

Steven L Schwarcz

Although microfinance has emerged as a key tool to alleviate poverty, the need for microfinance lending vastly exceeds the amount of funds that can be raised from charitable donors. Commercial bank lending is supplementing donor money, but microfinance loans made by banks are expensive and sometimes even exploitive. This article examines how innovative legal structures can enable microfinance loans to be funded directly from lower-cost, and virtually limitless, capital market sources by removing, or “disintermediating,” the need for a bank intermediary. In that context, the article identifies and attempts to resolve the resulting law-and-business issues of first impression and also …

Rights, Privileges And Access To Information, Alina Ng

Alina Ng

Protecting property rights in creative works represent a classic institutional approach to a specific economic problem of non-rivalness and non-excludability of information. By providing the copyright owner with an enforceable right against non-paying members of society, copyright laws encourage the production and dissemination of literary and artistic works to society for the purposes of learning. Implicit in the grant of property rights is the assumption that commercial incentives foster creative activity and productivity. In recent years, literary and artistic works have increasingly become the subject matter of exclusive property rights and control, particularly as new technologies emerge to provide users …

How "Big" Became Bad: America's Underage Fling With Universal Banks, Lawrence G. Baxter

Lawrence G. Baxter

In little more than a decade gigantic new financial institutions have emerged in America. These organizations are quite different from their predecessors in that they share the highly complex, diversified characteristics of foreign “universal banks.” They are still in the process of developing experienced and mature operational and risk management systems. During this same period, the regulatory framework necessary to match the size, power and hazards generated by these new universal banks remains underdeveloped, and the primary framework around which the system is being constructed, namely Basel II, lies in tatters in the wake of the financial crisis of 2007-08. …

The Broadcasters’ Transition Date Roulette: Strategic Aspects Of The Dtv Transition, James E. Prieger, James Miller

James E. Prieger

The analog to digital “DTV transition” completed in June 2009 was a technological event unprecedented in scale in the broadcast television industry. The final analog cutoff for TV stations culminated more than ten years of complex regulatory decisions. Facing concerns that costs and revenue could change dramatically, stations chose when to transition in response to both market and regulatory forces. The history of broadcasting reveals a continual interplay between consumer demand, technological change, and regulation. This article describes the various forces that influenced the DTV transition, and empirically examines the stations’ decisions regarding when to switch. The economic and strategic …

The Fox And The Ostrich: Is Gaap A Game Of Winks And Nods?, Arthur Acevedo

Arthur Acevedo

The fox is frequently described as sly, cunning and calculating in world literature. It is often associated with behavior that seeks advantage through trickery and pretext. The ostrich on the other hand, has been portrayed as cowardly and irrational. Its character defect is epitomized when it sticks its head in the sand at the first sign of trouble. The Financial Accounting Standards Board (FASB) can be described as the fox; the Securities Exchange Commission (SEC), the ostrich. This article examines the creation of accounting principles by the fox and the failure to govern by the ostrich. History demonstrates that the …

How Incentives Drove The Subprime Crisis, Charles W. Murdock

Charles W. Murdock

How Incentives Drove the Subprime Crisis

In order to address any systemic problem, whether the goal is to change the system, regulate the system, or change the incentives driving a system, it is necessary to appreciate all the drivers operating within the system. In the case of the subprime crisis, one of the drivers was the changing nature of the subprime loans, which was not factored into the models used by the investment bankers, the credit rating agencies, and the issuers of credit default swaps.

This paper is an attempt to look dispassionately at the subprime crisis from a particular …

Problematic Practices Of Credit Rating Agencies: The Neglected Risks Of Mortgage-Backed Securities, Franz Hosp

Franz P Hosp V

This paper provides an overview of the role that credit rating agencies played in the Financial Crisis of 2008. In doing so, the paper focuses on how credit rating agencies failed to properly rate mortgage-backed securities, which played an instrumental role in bringing about the current economic problems. The paper also suggests reforming the credit rating agencies by implementing a handicapping system that infuses economic value in good credit ratings.

The Equity Trustee, Kelli A. Alces

Kelli A. Alces

As we reel from the effects of a recent financial disaster, it is apparent that there is a significant gap in corporate governance and accountability for management. One reason why we have experienced this financial cataclysm is the inability of shareholders to do the “shareholder job.” Shareholders, as the putative owners of corporations, hold a venerated place in corporate governance. They are responsible for electing directors and monitoring management as well as valuing companies through trades in a vigorous market. The shareholder collective action problem and resulting rational apathy have kept shareholders from effectively fulfilling their role in corporate governance. …

Baseball's Moral Hazard: Law, Economics And The Designated Hitter Rule, Steve P. Calandrillo

Steve P. Calandrillo

No subject prompts greater disagreement among baseball fans than the designated hitter rule, which allows teams to designate a player to hit for the pitcher. The rule increases the number of hit batsmen, and some have suggested this effect is a result of “moral hazard,” which recognizes that persons insured against risk are more likely to engage in dangerous behavior. Because American League pitchers do not bat, they allegedly are not deterred by the full cost of making risky, inside pitches—namely, retribution during their next at bat. Using a law-and-economics approach, this Article concludes that the designated hitter rule creates …

Coase, Institutionalism, And The Origins Of Law And Economics, Herbert Hovenkamp

Herbert Hovenkamp

ABSTRACT

Ronald Coase merged two traditions in economics, marginalism and institutionalism. Neoclassical economics in the 1930s was characterized by an abstract conception of marginalism and frictionless resource movement. Marginal analysis did not seek to uncover the source of individual human preference, but accepted preference as given. It treated the business firm in the same way, focusing on how firms make market choices, but saying little about their internal workings.

“Institutionalism” historically refers to a group of economists who wrote mainly in the 1920s and 1930s. Their place in economic theory is outside the mainstream, but they have found new energy …

Medicare Meets Mephistopheles: Health Care, Government Spending, And Economic Prosperity, Neil H. Buchanan

Neil H. Buchanan

This essay is an edited version of my remarks during the first panel of the Mississippi College Law Review’s symposium on health care reform, which was held on February 26, 2010, in Jackson, Mississippi. The essay integrates my prepared comments with my responses to comments and questions during the discussion period. I have also added some further thoughts on several of the issues that are relevant to the subject matter, especially in light of the subsequent passage of a major federal health reform bill.

These remarks are necessarily brief, and they therefore can include only a hint of the issues …

On Systemically Important Financial Institutions And Progressive Systemic Mitigation, James B. Thomson

James Thomson

One of the most important issues in the regulatory reform debate is that of systemically important financial institutions. This paper proposes a framework for identifying and supervising such institutions; the framework is designed to remove the advantages they derive from becoming systemically important and to give them more time-consistent incentives. It defines the four C’s of systemic importance (contagion, concentration, correlation, and conditions) as criteria for classifying firms as systemically important that goes beyond binary classification based on size alone (the classic doctrine of too big to let fail); it also discusses the concept of progressive systemic mitigation.

An End To Too Big To Let Fail? The Dodd–Frank Act’S Orderly Liquidation Authority, Thomas J. Fitzpatrick Iv, James B. Thomson

James Thomson

One of the changes introduced by the sweeping new fi nancial market legislation of the Dodd–Frank Act is the provision of a formal process for liquidating large fi nancial fi rms—something that would have been useful in 2008, when troubles at Lehman Brothers, AIG, and Merrill Lynch threatened to damage the entire U.S. fi nancial system. While it may not be the end of the too-big-to-fail problem, the orderly liquidation authority is an important new tool in the regulatory toolkit. It will enable regulators to safely close and wind up the affairs of those distressed fi nancial fi rms whose …

Debt As Venture Capital, Darian M. Ibrahim

Darian M Ibrahim

Venture debt, or loans to rapid-growth start-ups, is a puzzle. How are start-ups with no track records, positive cash flows, tangible collateral, or personal guarantees from entrepreneurs able to attract billions of dollars in loans each year? And why do start-ups take on debt rather than rely exclusively on equity investments from angel investors and venture capitalists (VCs), as well-known capital structure theories from corporate finance would seem to predict in this context? Using hand-collected interview data and theoretical contributions from finance, economics, and law, this Article solves the puzzle of venture debt by revealing that a start-up’s VC backing …

Regulation By Markets And Higher Education, Benedict Sheehy

Benedict Sheehy

Markets have a number of uses. One increasingly important use by politicians is as a means of regulating the supply and distribution of goods and services formerly supplied and distributed by governments on non-market bases. The use of markets as a regulator of higher education is not novel. However, the increased reliance on markets as a regulator of higher education is an on-going experiment with certain predictable failures. This article explores the uses of the market in the supply and distribution of higher education and weighs it against the stated policy objectives, with particular attention to the application proposed in …

Chapter 7 - Restricting Fair Use To Save The News, Ryan T. Holte

Prof. Ryan T. Holte

Ryan T. Holte in “Restricting Fair Use to Save the News: A Proposed Change in Copyright Law to Bring More Profit to News Reporting” examines the present condition of the media and the economic and public policies behind protecting news. He further discusses current means of protecting information through copyright and misappropriation law, before proposing a change in the Copyright Act to better allow the news industry to reap profits from news reporting.