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Full-Text Articles in Law

On Duopoly And Compensation Games In The Credit Rating Industry, Robert J. Rhee Oct 2013

On Duopoly And Compensation Games In The Credit Rating Industry, Robert J. Rhee

Faculty Scholarship

Credit rating agencies are important institutions of the global capital markets. If they had performed properly, the financial crisis of 2008–2009 would not have occurred, and the course of world history would have been different. There is a near universal consensus that reform is needed, but none as to the best approach. The problem has not been solved. This Article offers the simplest fix proposed thus far, and it is contrarian. Unlike other reform proposals, this Article accepts the central role of rating agencies in the regulation of bond investments, the realities of a duopoly, and the issuer-pay model of …


On Duopoly And Compensation Games In The Credit Rating Industry, Robert J. Rhee Oct 2013

On Duopoly And Compensation Games In The Credit Rating Industry, Robert J. Rhee

UF Law Faculty Publications

Credit rating agencies are important institutions of the global capital markets. If they had performed properly, the financial crisis of 2008-2009 would not have occurred, and the course of world history would have been different. There is a near universal consensus that reform is needed, but none as to the best approach. The problem has not been solved. This Article offers the simplest fix proposed thus far, and it is contrarian. This Article accepts the central role of rating agencies in the regulation of bond investments, the realities of a duopoly, and the issuer-pay model of compensation. The status quo …


Is Financial Instability A Tax Problem With A Tax Solution?, Hilary Allen Jul 2013

Is Financial Instability A Tax Problem With A Tax Solution?, Hilary Allen

Articles in Law Reviews & Other Academic Journals

Financial regulation and taxation are two fields of law that are notoriously complex and specialized. Given thiscircumstance, it is perhaps not surprising that financial regulators often pay little attention to tax, and focusinstead on their own sphere of influence. Unfortunately, financial regulators ignore tax incentives at the peril offinancial stability.


Managing Regulatory Arbitrage: An Alternative To Harmonization, Annelise Riles Apr 2013

Managing Regulatory Arbitrage: An Alternative To Harmonization, Annelise Riles

Cornell Law Faculty Publications

This policy-oriented article argues for deploying conflict of laws doctrines as a tool of coordination in international financial governance.


Bretton Woods 1.0: A Constructive Retrieval For Sustainable Finance, Robert C. Hockett Jan 2013

Bretton Woods 1.0: A Constructive Retrieval For Sustainable Finance, Robert C. Hockett

Cornell Law Faculty Publications

Global trade imbalance and domestic financial fragility are intimately related. When a nation runs persistently massive current account deficits to maintain global liquidity as has the United States now for decades, its central bank effectively relinquishes exchange rate flexibility to become a de facto central bank to the world. That in turn prevents the bank from playing its essential credit-modulatory role at home, at least absent strict capital controls that are difficult to administer and have long been taboo. And this can in turn render credit-fueled asset price bubbles and busts all but impossible to prevent, irrespective of the nation's …


Regulation Of Over-The-Counter Derivatives: A Comparative Study Of Proposals In Singapore And Hong Kong, Chao-Hung Christopher Chen Jan 2013

Regulation Of Over-The-Counter Derivatives: A Comparative Study Of Proposals In Singapore And Hong Kong, Chao-Hung Christopher Chen

Research Collection Yong Pung How School Of Law

This chapter identifies some of the potential legal and policy issues involved in the future regulation of over-the-counter (OTC) derivatives. First, regulators must be cautious in the regulation and solvency of some mammoth clearing- houses. Second, Singapore and Hong Kong both face challenges in the areas of global regulatory cooperation and extra-territorial regulatory effects. Third, the exact scope of a clearing obligation determines whether there is any regulatory competition or room for regulatory arbitrage in the future. Fourth, there are legal definition problems with the term ‘derivative’ and its sub-categories that must be addressed. Fifth, there are potential privacy and …


Dinner Parties During "Lost Decades": On The Difficulties Of Rethinking Financial Markets, Fostering Elite Consensus, And Renewing Political Economy, David A. Westbrook Jan 2013

Dinner Parties During "Lost Decades": On The Difficulties Of Rethinking Financial Markets, Fostering Elite Consensus, And Renewing Political Economy, David A. Westbrook

Journal Articles

Two groups of problems that ought to be understood in relation to one another: economic trends in the North Atlantic societies, and the capacity to collectively thinking, discussing, and even decide on what to do about our economy. Part One argues that economic policy and economic life are not only intertwined, but compromise one another. Part Two uses the World Economics Association's recent virtual conference, Rethinking Financial Markets to discuss some possibilities for fostering collective thought. Part Three briefly discusses the nature of the economy at the present time, i.e., the tasks confronting contemporary economic policy elites.


The New Investor, Tom C. W. Lin Jan 2013

The New Investor, Tom C. W. Lin

UF Law Faculty Publications

A sea change is happening in finance. Machines appear to be on the rise and humans on the decline. Human endeavors have become unmanned endeavors. Human thought and human deliberation have been replaced by computerized analysis and mathematical models. Technological advances have made finance faster, larger, more global, more interconnected, and less human. Modern finance is becoming an industry in which the main players are no longer entirely human. Instead, the key players are now cyborgs: part machine, part human. Modern finance is transforming into what this Article calls cyborg finance.

This Article offers one of the first broad, descriptive, …


The Aig Story (Chapter 18, Nationalization), Lawrence A. Cunningham, Maurice R. Greenberg Jan 2013

The Aig Story (Chapter 18, Nationalization), Lawrence A. Cunningham, Maurice R. Greenberg

GW Law Faculty Publications & Other Works

This is the final chapter of The AIG Story, a book about the growth of a large international insurance company that pioneered the opening of new markets and helped forge milestone international trade agreements, followed by an account of its near-destruction, first at the hands of an overzealous state attorney general and underwhelming board of directors, and then, as detailed in this chapter, at the hands of federal government officials overwhelmed by a financial crisis they could not understand. This chapter begins in mid-2008, when AIG’s losing financial products bets presented the company with a huge liquidity problem, though it …


Interbank Discipline, Kathryn Judge Jan 2013

Interbank Discipline, Kathryn Judge

Faculty Scholarship

As banking has evolved over the last three decades, banks have become increasingly interconnected. This Article draws attention to an effect of this development that has important policy ramifications yet remains largely unexamined – a dramatic rise in interbank discipline. The Article demonstrates that today's large, complex banks have financial incentives to monitor risk taking at other banks, They also have the infrastructure, competence, and information required to be fairly effective monitors and mechanisms through which they can respond when a bank changes its risk profile. Interbank discipline thus affects bank risk taking, discouraging banks from taking some types of …