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Articles 1 - 11 of 11
Full-Text Articles in Law
Keynote Address: Understanding The ‘Subprime’ Financial Crisis, Steven L. Schwarcz
Keynote Address: Understanding The ‘Subprime’ Financial Crisis, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.
Keynote Address: The Case For A Market Liquidity Provider Of Last Resort, Steven L. Schwarcz
Keynote Address: The Case For A Market Liquidity Provider Of Last Resort, Steven L. Schwarcz
Faculty Scholarship
This short paper, prepared as a keynote address, explains why the credit crunch is fundamentally a story about financial markets, not banks. Its cause was a collapse of securitization and other debt markets, which have become major sources of financing for consumers and companies. Deprived of this financing, consumers have had difficulty purchasing homes and automobiles, and companies have had difficulty purchasing inventory and making capital investments, causing the real economy to shrink. This paper examines how these financial markets should be protected. Although already subject to many prescriptive regulatory protections, these markets evolve faster than regulation can adapt. The …
Innovation After The Revolution: Foreign Sovereign Bond Contracts Since 2003, Mitu Gulati, Anna Gelpern
Innovation After The Revolution: Foreign Sovereign Bond Contracts Since 2003, Mitu Gulati, Anna Gelpern
Faculty Scholarship
For over a decade, contracts literature has focused on standardization. Scholars asked how terms become standard, and why they change so rarely. This line of inquiry painted a world where a standard term persists until it is dislodged by another standard term, perhaps after a brief window of ferment before the second term takes hold. It also overshadowed the early insights of boilerplate theories, which described contracts as a mix of standard and customized terms, and asked why the mix might be suboptimal. This article brings the focus back to the mix. It examines the development of selected provisions in …
Do Differences In Pleading Standards Cause Forum Shopping In Securities Class Actions?: Doctrinal And Empirical Analyses, James D. Cox, Randall S. Thomas, Lynn Bai
Do Differences In Pleading Standards Cause Forum Shopping In Securities Class Actions?: Doctrinal And Empirical Analyses, James D. Cox, Randall S. Thomas, Lynn Bai
Faculty Scholarship
No abstract provided.
Regulating Complexity In Financial Markets, Steven L. Schwarcz
Regulating Complexity In Financial Markets, Steven L. Schwarcz
Faculty Scholarship
As the financial crisis has tragically illustrated, the complexities of modern financial markets and investment securities can trigger systemic market failures. Addressing these complexities, this Article maintains, is perhaps the greatest financial-market challenge of the future. The Article first examines and explains the nature of these complexities. It then analyzes the regulatory and other steps that should be considered to reduce the potential for failure. Because complex financial markets resemble complex engineering systems, and failures in those markets have characteristics of failures in those systems, the Article‟s analysis draws on chaos theory and other approaches used to analyze complex engineering …
The Coroner’S Inquest: Ecuador’S Default And Sovereign Bond Documentation, Mitu Gulati, Lee C. Buchheit
The Coroner’S Inquest: Ecuador’S Default And Sovereign Bond Documentation, Mitu Gulati, Lee C. Buchheit
Faculty Scholarship
Conventional wisdom is that sovereigns will rarely, if ever, default on their external debts in circumstances where it is clear that they have the capacity to pay. The first line of defense against the errant sovereign is its concern about reputation. It may have to tap the external debt markets again in the future; and there is the fear that the markets will extract revenge. But reputational constraints do not always work because some governments heavily discount future costs in favor of current benefits. When reputational constraints fail, however, a second line of defense is supposed to come into play. …
Reinventing The Sec By Staring Into Its Past, James D. Cox
Reinventing The Sec By Staring Into Its Past, James D. Cox
Faculty Scholarship
No abstract provided.
The ‘Principles’ Paradox, Steven L. Schwarcz
The ‘Principles’ Paradox, Steven L. Schwarcz
Faculty Scholarship
This essay, prepared for a University of Cambridge conference on ‘Principles Versus Rules in Financial Regulation’, posits a new issue in that debate. Although principles-based regulation is thought to more closely achieve normative goals than rules, the extent to which that occurs can depend on the enforcement regime. A person who is subject to unpredictable liability is likely to hew to the most conservative interpretation of the principle, especially where that person would be a potential deep pocket in litigation. This creates a paradox: unless protected by a regime enabling one in good faith to exercise judgment without fear of …
The Future Of Securitization, Steven L. Schwarcz
The Future Of Securitization, Steven L. Schwarcz
Faculty Scholarship
Securitization, a process in which firms can raise low-cost financing by efficiently allocating asset risks with investor appetite for risk, has been one of the most dominant and fastest-growing means of capital formation in the United States and the world. The subprime financial crisis, however, has revealed certain defects with how securitization is sometimes utilized. This article examines these defects and the extent they can, and should, be remedied going forward.
Coping In A Global Marketplace: Survival Strategies For A 75-Year-Old Sec, James D. Cox
Coping In A Global Marketplace: Survival Strategies For A 75-Year-Old Sec, James D. Cox
Faculty Scholarship
Notwithstanding cynicism to the contrary, data bears witness to the fact that government agencies come and go. There are multiple causes that give rise to their disappearance but among the most powerful is that conditions that first gave rise to the particular agency's creation no longer exist so that the regulatory needs that once prevailed are no longer present or that there is a better governmental response than Congress' earlier embraced when it initially created an independent regulatory agency to address the problems needing to be addressed. Certainly the more rigid the regulatory authority conferred on an agency has much …
Keynote Address: The Conflicted Trustee Dilemma, Steven L. Schwarcz
Keynote Address: The Conflicted Trustee Dilemma, Steven L. Schwarcz
Faculty Scholarship
No abstract provided.