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Full-Text Articles in Law

Cleaning Corporate Governance, Jens Frankenreiter, Cathy Hwang, Yaron Nili, Eric L. Talley Jan 2021

Cleaning Corporate Governance, Jens Frankenreiter, Cathy Hwang, Yaron Nili, Eric L. Talley

Faculty Scholarship

Although empirical scholarship dominates the field of law and finance, much of it shares a common vulnerability: an abiding faith in the accuracy and integrity of a small, specialized collection of corporate governance data. In this paper, we unveil a novel collection of three decades’ worth of corporate charters for thousands of public companies, which shows that this faith is misplaced.

We make three principal contributions to the literature. First, we label our corpus for a variety of firm- and state-level governance features. Doing so reveals significant infirmities within the most well-known corporate governance datasets, including an error rate exceeding ...


Preparing Legal Frameworks For Environmental Disasters: Practical Considerations For Host States, Brooke Guven, Perrine Toledano, Lise Johnson Feb 2020

Preparing Legal Frameworks For Environmental Disasters: Practical Considerations For Host States, Brooke Guven, Perrine Toledano, Lise Johnson

Columbia Center on Sustainable Investment Staff Publications

Projects in the extractives sector carry risks of lasting, and sometimes irreversible, damage to the environment. Nonetheless, these projects are important for accelerating the economic development of host countries. Governments seeking to mitigate the adverse effects of foreign investment often face pushback from investors that are unwilling to change their practices in order to avert environmental disaster. This report sets forth certain steps that host-governments can take during the pre-investment, operation, and enforcement phases of extractives projects to provide financial and other protection in the context of environmental disasters associated with private sector investments.

Upon comparative review of five Case ...


Why Financial Regulation Keeps Falling Short, Dan Awrey, Kathryn Judge Jan 2020

Why Financial Regulation Keeps Falling Short, Dan Awrey, Kathryn Judge

Faculty Scholarship

This article argues that there is a fundamental mismatch between the nature of finance and current approaches to financial regulation. Today’s financial system is a dynamic and complex ecosystem. For these and other reasons, policy makers and market actors regularly have only a fraction of the information that may be pertinent to decisions they are making. The processes governing financial regulation, however, implicitly assume a high degree of knowability, stability, and predictability. Through two case studies and other examples, this article examines how this mismatch undermines financial stability and other policy aims. This examination further reveals that the procedural ...


Petition For Rulemaking On Short And Distort, John C. Coffee Jr., Joshua Mitts, James D. Cox, Peter Molk, Edward Greene, Randall S. Thomas, Meyer-Eisenberg, Robert B. Thompson, Colleen Honigsberg, Andrew Verstein, Donald C. Langevoort, Charles K. Whitehead Jan 2020

Petition For Rulemaking On Short And Distort, John C. Coffee Jr., Joshua Mitts, James D. Cox, Peter Molk, Edward Greene, Randall S. Thomas, Meyer-Eisenberg, Robert B. Thompson, Colleen Honigsberg, Andrew Verstein, Donald C. Langevoort, Charles K. Whitehead

Faculty Scholarship

Today, some hedge funds attack public companies for the sole purpose of inducing a short-lived panic which they can exploit for profit. This sort of market manipulation harms average investors who entrust financial markets with their retirement savings. While short selling serves a critical function in the capital markets, some short sellers disseminate negative opinion about a company, inducing a panic and sharp decline in the stock price, and rapidly close that position for a profit prior to the price partially or fully rebounding. We urge the SEC to enact two rules which will discourage manipulative short selling. The petition ...


An Efficiency Analysis Of Defensive Tactics, Ronald J. Gilson, Alan Schwartz Jan 2020

An Efficiency Analysis Of Defensive Tactics, Ronald J. Gilson, Alan Schwartz

Faculty Scholarship

For thirty five years, courts and scholars have divided over the effects of defensive tactics in the market for corporate control. Strong defensive tactics locate authority to accept a hostile bid in the target’s board. The board can bargain for a higher takeover price than uncoordinated shareholders could realize but high takeover prices may reduce shareholder returns by reducing the likelihood of receiving a bid. The Delaware Courts themselves disagree. The Delaware Chancery Court would locate ultimate decision authority in the target’s shareholders, while the Supreme Court, by permitting strong defensive tactics, allocates extensive power to the target ...


Bankruptcy’S Role In The Covid-19 Crisis, Edward R. Morrison, Andrea C. Saavedra Jan 2020

Bankruptcy’S Role In The Covid-19 Crisis, Edward R. Morrison, Andrea C. Saavedra

Faculty Scholarship

Policymakers have minimized the role of bankruptcy law in mitigating the financial fallout from COVID-19. Scholars too are unsure about the merits of bankruptcy, especially Chapter 11, in resolving business distress. We argue that Chapter 11 complements current stimulus policies for large corporations, such as the airlines, and that Treasury should consider making it a precondition for receiving government-backed financing. Chapter 11 offers a flexible, speedy, and crisis-tested tool for preserving businesses, financing them with government funds (if necessary), and ensuring that the costs of distress are borne primarily by investors, not taxpayers. Chapter 11 saves businesses and employment, not ...


How To Help Small Businesses Survive Covid-19, Todd Baker, Kathryn Judge Jan 2020

How To Help Small Businesses Survive Covid-19, Todd Baker, Kathryn Judge

Faculty Scholarship

Small businesses are among the hardest hit by the COVID-19 crisis. Many are shuttered, and far more face cash flow constraints, raising questions about just how many will survive this recession. The government has responded with a critical forgivable loan program, but for many of these businesses, this program alone will not provide the cash they need to retain workers, pay rent, and help their business come back to life when Americans are no longer sheltering in place. This essay calls on regulators to find new and creative ways to work with existing intermediaries, including banks and online lenders, who ...


The Covid-19 Pandemic And Business Law: A Series Of Posts From The Oxford Business Law Blog, Gert-Jan Boon, Markus K. Brunnermeier, Horst Eidenmueller, Luca Enriques, Aurelio Gurrea-Martínez, Kathryn Judge, Jean-Pierre Landau, Marco Pagano, Ricardo Reis, Kristin Van Zwieten Jan 2020

The Covid-19 Pandemic And Business Law: A Series Of Posts From The Oxford Business Law Blog, Gert-Jan Boon, Markus K. Brunnermeier, Horst Eidenmueller, Luca Enriques, Aurelio Gurrea-Martínez, Kathryn Judge, Jean-Pierre Landau, Marco Pagano, Ricardo Reis, Kristin Van Zwieten

Faculty Scholarship

The COVID-19 Pandemic is the biggest challenge for the world since World War Two, warned UN Secretary General, António Guterres, on 1 April 2020. Millions of lives may be lost. The threat to our livelihoods is extreme as well. Job losses worldwide may exceed 25 million.

Legal systems are under extreme stress too. Contracts are disrupted, judicial services suspended, and insolvency procedures tested. Quarantine regulations threaten constitutional liberties. However, laws can also be a powerful tool to contain the effects of the pandemic on our lives and reduce its economic fallout. To achieve this goal, rules designed for normal times ...


Stress Testing During Times Of War, Kathryn Judge Jan 2020

Stress Testing During Times Of War, Kathryn Judge

Faculty Scholarship

The COVID crisis raises important questions about the role of stress testing during periods of systemic distress. Should stress testing of banks be abandoned? Modified? Proceed as scheduled? Different jurisdictions have taken different tacks, reflecting contestation over these fundamental issues. This essay argues that stress tests become more important, not less, in the midst of systemic distress, but only if the stress scenarios are modified to reflect the distinct challenges an economy is facing. Well-designed stress tests can provide critical information to policy makers and others, promoting more timely efforts to address underlying weaknesses. Given that regulators will rationally be ...


Innovation Versus Encrustation: Agency Costs In Contract Reproduction, Stephen J. Choi, Mitu Gulati, Robert E. Scott Jan 2020

Innovation Versus Encrustation: Agency Costs In Contract Reproduction, Stephen J. Choi, Mitu Gulati, Robert E. Scott

Faculty Scholarship

This article studies the impact of exogenous legal change on whether and how lawyers across four different deal types revise their contracts’ governing law clauses in order to solve the problem that the legal change created. The governing law clause is present in practically every contract across a wide range of industries and, in particular, it appears in deals as disparate as private equity M&A transactions and sovereign bond issuances. Properly drafted, the clause increases the ex ante economic value of the contract to both parties by reducing uncertainty and litigation risk. We posit that different levels of agency ...


Driver For Contactless Payments, Ronald J. Mann Jan 2020

Driver For Contactless Payments, Ronald J. Mann

Faculty Scholarship

As a consumer, my primary experience with cash before the virus was standing in checkout lines observing the sluggish pace of cash transactions in front of me. Like so many things in our lives, the advent of the virus has changed the situation markedly. From the earliest days of infection, it has been far more unsettling to observe cash transactions knowing that the virus persists on paper and metal surfaces for days.

The dynamic that has driven the choices merchants offer in face-to-face retail transactions will change as well. Driven by the private exigencies of the retail environment, the last ...


Restructuring Vs. Bankruptcy, Jason Roderick Donaldson, Edward R. Morrison, Giorgia Piacentino, Xiaobo Yu Jan 2020

Restructuring Vs. Bankruptcy, Jason Roderick Donaldson, Edward R. Morrison, Giorgia Piacentino, Xiaobo Yu

Faculty Scholarship

We develop a model of a firm in financial distress. Distress can be mitigated by filing for bankruptcy, which is costly, or preempted by restructuring, which is impeded by a collective action problem. We find that bankruptcy and restructuring are complements, not substitutes: Reducing bankruptcy costs facilitates restructuring, rather than crowding it out. And so does making bankruptcy more debtor-friendly, under a condition that seems likely to hold now in the United States. The model gives new perspectives on current relief policies (e.g., subsidized loans to firms in bankruptcy) and on long-standing legal debates (e.g., the efficiency of ...


For Coöperation And The Abolition Of Capital, Or, How To Get Beyond Our Extractive Punitive Society And Achieve A Just Society, Bernard E. Harcourt Jan 2020

For Coöperation And The Abolition Of Capital, Or, How To Get Beyond Our Extractive Punitive Society And Achieve A Just Society, Bernard E. Harcourt

Faculty Scholarship

In hindsight, the term "capitalism" was always a misnomer, coined paradoxically by its critics in the nineteenth century. The term misleadingly suggests that the existence of capital produces a unique economic system or that capital itself is governed by economic laws. But that's an illusion. In truth, we do not live today in a system in which capital dictates our economic circumstances. Instead, we live under the tyranny of what I would call "tournament dirigisme": a type of state-directed gladiator sport where our political leaders bestow spoils on the wealthy, privileged elite.

We need to displace this tournament dirigisme ...


Why The Fed Should Issue A Policy Framework For Credit Policy, Kathryn Judge Jan 2020

Why The Fed Should Issue A Policy Framework For Credit Policy, Kathryn Judge

Faculty Scholarship

The Federal Reserve has long used policy frameworks to both explain and inform its policymaking. These policy frameworks typically explain what the Fed is seeking to achieve in a given domain and how it plans to achieve its desired aims. Two prominent examples are the Fed’s use of Bagehot’s dictum when acting as a lender of last resort and its monetary policy framework issued in 2012 and revised in 2020. In both instances, the framework provides a foundation for informed debate among Fed policymakers, Congress, and the public, enhancing both efficacy and accountability. Since the onset of the ...


Don't Go Chasing Waterfalls: Fiduciary Duties In Venture Capital Backed Startups, Sarath Sanga, Eric L. Talley Jan 2020

Don't Go Chasing Waterfalls: Fiduciary Duties In Venture Capital Backed Startups, Sarath Sanga, Eric L. Talley

Faculty Scholarship

Venture-capital-backed startups are often crucibles of conflict between common and preferred shareholders, particularly around exit decisions. Such conflicts are so common, in fact, that they have catalyzed an emergent judicial precedent – the Trados doctrine – that requires boards to prioritize common shareholders' interest and to treat preferred shareholders as contractual claimants. We evaluate the Trados doctrine using a model of startup governance that interacts capital structure, corporate governance, and liability rules. The nature and degree of inter-shareholder conflict turns not only on the relative rights and options of equity participants, but also on a firm's intrinsic value as well as ...


Executive Underreach, In Pandemics And Otherwise, David E. Pozen, Kim Lane Scheppele Jan 2020

Executive Underreach, In Pandemics And Otherwise, David E. Pozen, Kim Lane Scheppele

Faculty Scholarship

Legal scholars are familiar with the problem of executive overreach, especially in emergencies. But sometimes, instead of being too audacious or extreme, a national executive's attempts to address a true threat prove far too limited and insubstantial. In this Essay, we seek to define and clarify the phenomenon of executive underreach, with special reference to the COVID-19 crisis; to outline ways in which such underreach may compromise constitutional governance and the international legal order; and to suggest a partial remedy.


Aligning Investment Treaties With Sustainable Development Goals, Lise Johnson, Lisa E. Sachs, Nathan Lobel Dec 2019

Aligning Investment Treaties With Sustainable Development Goals, Lise Johnson, Lisa E. Sachs, Nathan Lobel

Columbia Center on Sustainable Investment Staff Publications

Policy makers and other stakeholders are currently asking fundamental questions about whether and to what extent international investment agreements (IIAs) are consistent with and are helping to advance sustainable development objectives at home and abroad.

A 2019 paper from CCSI examines the alignment of IIAs with the 2030 Sustainable Development Agenda, arguing that while FDI will play an important role in advancing development outcomes, existing treaties must be reformed and future IIAs reimagined in order to achieve deep alignment with the sustainable development goals.

The paper proposes that IIAs should be designed and evaluated with respect to their ability to ...


The New Mechanisms Of Market Inefficiency, Kathryn Judge Jan 2019

The New Mechanisms Of Market Inefficiency, Kathryn Judge

Faculty Scholarship

Mechanisms of market inefficiency are some of the most important and least understood institutions in financial markets today. A growing body of empirical work reveals a strong and persistent demand for “safe assets,” financial instruments that are sufficiently low risk and opaque that holders readily accept them at face value. The production of such assets, and the willingness of holders to treat them as information insensitive, depends on the existence of mechanisms that promote faith in the value of the underlying assets while simultaneously discouraging information production specific to the value of those assets. Such mechanisms include private arrangements, like ...


Revising Boilerplate: A Comparison Of Private And Public Company Transactions, Stephen J. Choi, Robert E. Scott, G. Mitu Gulati Jan 2019

Revising Boilerplate: A Comparison Of Private And Public Company Transactions, Stephen J. Choi, Robert E. Scott, G. Mitu Gulati

Faculty Scholarship

The phenomenon of “sticky boilerplate” causing inefficient contract terms to persist exists across a variety of commercial contract types. One explanation for this failure to revise suboptimal terms is that the key agents on these transactions, including attorneys and investment bankers, are short sighted; their incentives are to get the deal done rather than ensure that they are using the best terms possible for their clients. Moreover, these agents face a first mover disadvantage that deters unilateral revisions to inefficient terms. If agency costs are indeed driving the stickiness phenomenon, we expect that the pace of revision will vary across ...


A Better Financing System? The Death – And Possible Rebirth – Of The Presidential Nomination Public Financing Program, Richard Briffault Jan 2019

A Better Financing System? The Death – And Possible Rebirth – Of The Presidential Nomination Public Financing Program, Richard Briffault

Faculty Scholarship

In 1974 Congress authorized public funding for presidential nomination campaigns. Public funding was crucial to Jimmy Carter’s nomination in 1976 and to Ronald Reagan’s nearly successful campaign the same year, and continued to be an important factor in presidential nomination contests for more than two decades after that. But no major candidate has used the program since 2004. Due the program’s built-in limitations, changes in the nomination process, and campaign finance developments, the program is completely irrelevant today.

It has been argued that the program isn’t really needed. Although one argument for public funding is that ...


Long-Term Bias, Eric L. Talley, Michal Barzuza Jan 2019

Long-Term Bias, Eric L. Talley, Michal Barzuza

Faculty Scholarship

An emerging consensus in certain legal, business, and scholarly communities maintains that corporate managers are pressured unduly into chasing short-term gains at the expense of superior long-term prospects. The forces inducing managerial myopia are easy to spot, typically embodied by activist hedge funds and Wall Street gadflies with outsized appetites for next quarter’s earnings. Warnings about the dangers of “short termism” have become so well established, in fact, that they are now driving changes to mainstream practice, as courts, regulators and practitioners fashion legal and transactional constraints designed to insulate firms and managers from the influence of investor short-termism ...


Why Do Auditors Fail? What Might Work? What Won't?, John C. Coffee Jr. Jan 2019

Why Do Auditors Fail? What Might Work? What Won't?, John C. Coffee Jr.

Faculty Scholarship

Auditing failures and scandals have become commonplace. In response, reformers (including the Kingman Review in the U.K and a recent report of the U.K.’s Competition and Market Authority) have proposed a variety of remedies, including prophylactic bans on auditors providing consulting services to their clients in the belief that this will minimize the conflicts of interest that produce auditing failures. Although useful, such reforms are already in place to a considerable degree and may have reached the point of diminishing returns. Moreover, this strategy does not address the deeper problem that clients (or their managements) may not ...


Being True To Trulia: Do Disclosure-Only Settlements In Merger Objection Lawsuits Harm Shareholders?, Eric L. Talley, Giuseppe Dari‐Mattiacci Jan 2019

Being True To Trulia: Do Disclosure-Only Settlements In Merger Objection Lawsuits Harm Shareholders?, Eric L. Talley, Giuseppe Dari‐Mattiacci

Faculty Scholarship

A significant debate within mergers and acquisitions law concerns the explosive popularity of the “merger objection lawsuit” (MOL), a shareholder action seeking to enjoin an announced deal on fiduciary duty grounds. MOLs blossomed during the Financial Crisis, becoming popularly associated with “shareholder shakedowns,” whereby quick-triggered plaintiff attorneys would file against – and then rapidly settle with – acquirers, typically on non-monetary terms containing modest added disclosures in exchange for blanket class releases and attorney fee awards. This practice unleashed a torrent of criticism from lawyers, commentators, academics, and (ultimately) judges, culminating in a doctrinal shift in Delaware law in the January 2016 ...


Corporate Governance For Sustainability, Andrew Johnston, Jeroen Veldman, Robert G. Eccles, Simon Deakin, Jerry Davis, Marie-Laure Djelic, Katharina Pistor, Blanche Segrestin, William M. Gentry, Cynthia A. Williams, David Millon, Paddy Ireland, Beate Sjåfjell, Christopher M. Bruner, Lorraine E. Talbot, Hugh Christopher Willmott, Charlotte Villiers, Carol Liao, Bertrand Valiorgue, Jason Glynos, Todd L. Sayre, Bronwen Morgan, Rick Wartzman, Prem Sikka, Filip Gregor, David Carroll Jacobs, Roger Gill, Roger Brown, Vincenzo Bavoso, Neil Lancastle, Julie Matthaei, Scott Taylor, Ulf Larsson-Olaison, Jay Cullen, Alan J. Dignam, Thomas Wuil Joo, Ciarán O'Kelly, Con Keating, Roman Tomasic, Simon Lilley, Kevin Tennent, Keith Robson, Willy Maley, Iris H-Y Chiu, Ewan Mcgaughey, Chris Rees, Nina Boeger, Adam Leaver, Marc T. Moore, Leen Paape, Alan D. Meyer, Marcello Palazzi, Nitasha Kaul, Juan Felipe Espinosa-Cristia, Timothy Kuhn, David J. Cooper, Susanne Soederberg, Andreas Jansson, Susan Watson, Ofer Sitbon, Joan Loughrey, David Collison, Maureen Mcculloch, Navajyoti Samanta, Daniel J.H. Greenwood, Grahame F. Thompson, Andrew R. Keay, Alessia Contu, Andreas Rühmkorf, Richard Hull, Irene-Marie Esser, Nihel Chabrak Jan 2019

Corporate Governance For Sustainability, Andrew Johnston, Jeroen Veldman, Robert G. Eccles, Simon Deakin, Jerry Davis, Marie-Laure Djelic, Katharina Pistor, Blanche Segrestin, William M. Gentry, Cynthia A. Williams, David Millon, Paddy Ireland, Beate Sjåfjell, Christopher M. Bruner, Lorraine E. Talbot, Hugh Christopher Willmott, Charlotte Villiers, Carol Liao, Bertrand Valiorgue, Jason Glynos, Todd L. Sayre, Bronwen Morgan, Rick Wartzman, Prem Sikka, Filip Gregor, David Carroll Jacobs, Roger Gill, Roger Brown, Vincenzo Bavoso, Neil Lancastle, Julie Matthaei, Scott Taylor, Ulf Larsson-Olaison, Jay Cullen, Alan J. Dignam, Thomas Wuil Joo, Ciarán O'Kelly, Con Keating, Roman Tomasic, Simon Lilley, Kevin Tennent, Keith Robson, Willy Maley, Iris H-Y Chiu, Ewan Mcgaughey, Chris Rees, Nina Boeger, Adam Leaver, Marc T. Moore, Leen Paape, Alan D. Meyer, Marcello Palazzi, Nitasha Kaul, Juan Felipe Espinosa-Cristia, Timothy Kuhn, David J. Cooper, Susanne Soederberg, Andreas Jansson, Susan Watson, Ofer Sitbon, Joan Loughrey, David Collison, Maureen Mcculloch, Navajyoti Samanta, Daniel J.H. Greenwood, Grahame F. Thompson, Andrew R. Keay, Alessia Contu, Andreas Rühmkorf, Richard Hull, Irene-Marie Esser, Nihel Chabrak

Faculty Scholarship

The current model of corporate governance needs reform. There is mounting evidence that the practices of shareholder primacy drive company directors and executives to adopt the same short time horizon as financial markets. Pressure to meet the demands of the financial markets drives stock buybacks, excessive dividends and a failure to invest in productive capabilities. The result is a ‘tragedy of the horizon’, with corporations and their shareholders failing to consider environmental, social or even their own, long-term, economic sustainability.

With less than a decade left to address the threat of climate change, and with consensus emerging that businesses need ...


Valuation Disputes In Corporate Bankruptcy, Kenneth M. Ayotte, Edward R. Morrison Jan 2018

Valuation Disputes In Corporate Bankruptcy, Kenneth M. Ayotte, Edward R. Morrison

Faculty Scholarship

Prior scholarship points to disagreements about valuation and judicial valuation error as key drivers of Chapter 11 outcomes. Avoiding valuation disputes and valuation errors is also the underlying driver of most proposed reforms, from Baird’s auctions to Bebchuk’s options. In this paper, we undertake a detailed examination of bankruptcy court opinions involving valuation disputes. Our paper has two goals. The first is to understand how parties and their expert witnesses justify their opposing views to the judge, and how judges decide between them. The second is to provide practical guidance to judges in resolving valuation disputes. We document ...


The Origins Of A Capital Market Union In The United States, Jeffrey N. Gordon, Kathryn Judge Jan 2018

The Origins Of A Capital Market Union In The United States, Jeffrey N. Gordon, Kathryn Judge

Faculty Scholarship

EU policy-makers have focused on the creation of a “Capital Market Union” to advance the economic vitality of the EU in the aftermath of the Global Financial Crisis of 2007-09 and the Eurozone crisis of 2011-13. The hope is that EU-wide capital markets will help remedy the limitations in the EU’s pattern of bank-centered finance, which, despite the launch of the Banking Union, remains tied to Member States. Capital market development will provide alternative channels for finance, which will facilitate greater resiliency, more economic integration within the EU, and more choices for savers and firms. This chapter uses the ...


Regulation And Deregulation: The Baseline Challenge, Kathryn Judge Jan 2018

Regulation And Deregulation: The Baseline Challenge, Kathryn Judge

Faculty Scholarship

A core challenge for financial regulation is how best to address the inherent dynamism of finance. The financial system is engineered to change. Periods of stability, evolving macroeconomic conditions, and regulation are among the forces driving the constant shape shifting of finance. As a result, rules established at Time A often have a different substantive effect at Time B. And because efforts to reduce the cost of complying with regulatory burdens, commonly known as regulatory arbitrage, are among the forces driving this change, a static regulatory regime will tend to be inherently deregulatory.

Currently, the processes through which the law ...


Guarantor Of Last Resort, Kathryn Judge Jan 2018

Guarantor Of Last Resort, Kathryn Judge

Faculty Scholarship

The optimal response to a financial crisis entails addressing two, often conflicting, demands: stopping the panic and starting the clock. When short-term depositors flee, banks can be forced to sell assets at fire-sale prices, causing credit to contract and real economic activity to decline. To reduce these adverse spillover effects, policymakers routinely intervene to stop systemic runs. All too often, however, policymakers deploy stopgap measures that allow the underlying problems to fester. To promote long-term economic health, they must also ferret out the underlying problems and allocate the losses that cannot be avoided. A well-designed guarantor of last resort can ...


Economic Democracy And Enterprise Form In Finance, William H. Simon Jan 2018

Economic Democracy And Enterprise Form In Finance, William H. Simon

Faculty Scholarship

This comment – a contribution to a project on “democratizing finance” – considers the relative advantages of alternative enterprise forms from the point of view of public accountability. It compares the business corporation to the state agency or authority, the cooperative, the state corporation, and the charitable nonprofit. These forms can be distinguished in terms of whether they aspire to enhance general electoral democracy or stakeholder democracy and in terms of whether their democratic controls operate directly or indirectly. I suggest that the more indirect democratic forms may be more promising than the more direct ones. I also argue that the project ...


The Importance Of "Money", Kathryn Judge Jan 2017

The Importance Of "Money", Kathryn Judge

Faculty Scholarship

In a provocative new book, The Money Problem: Rethinking Financial Regulation, Professor Morgan Ricks argues that the government should reclaim control over money creation. Money, Ricks argues, is not just the cash in your pocket or the balance in your checking account. Instead, at least for purposes of financial stability policy, money is best equated with short-term debt. For most of the twentieth century, such debt was issued primarily by regulated commercial banks and insured by the Federal Deposit Insurance Corporation (FDIC), resulting in a fairly stable financial system. As a result of financial innovation, however, much of today's ...