Banking and Finance Law Commons^™

Card Act's Ability To Pay Proposal Ignites Public Policy Debate, Manley Williams, Sara E. Emley

American University Law Review

No abstract provided.

Financial Reform And The Causes Of The Financial Crisis, Brooksley Born

American University Business Law Review

No abstract provided.

Of The Conditional Fee As A Response To Lawyers, Bankers And Loopholes, Claire Hill, Richard Painter

American University Business Law Review

No abstract provided.

Risk Management, Responsive Regulation, And Oversight Of Structured Financial Product Markets, Janis P. Sarra

All Faculty Publications

Globally, regulators, supervisory authorities, and governments are grappling with what have now been identified as systemic risk factors that contributed to the recent global financial crisis. Internationally, the Basel Committee on Banking Supervision and other organizations are developing standards to identify and address systemic risk, suggesting that the extent of regulation or exemption from it can serve as a mechanism by which risk is transferred within the financial system. The Cross-border Bank Resolution Group of the Basel Committee has developed ten recommendations as a result of its stocktaking of lessons learned from the financial crisis.' The Financial Stability Board (FSB), …

The International Anti-Money Laundering And Combating The Financing Of Terrorism Regulatory Strategy: A Critical Analysis Of Compliance Determinants In International Law, Navin Beekarry

Northwestern Journal of International Law & Business

Concerns about the risks money laundering (ML) and terrorist financing (TF) present to the stability of the international financial system have resurfaced in the context of the liquidity problems faced by financial institutions as a result of the recent credit crisis (2008). Because ML and TF evolve with new criminal activities and methodologies, ML and TF present systemic threats to the stability of the financial system. Addressing new developments in ML/TF and their associated risks requires a sufficiently flexible and adaptable international regulatory strategy. In this paper, I examine the international anti-money laundering and combating the financing of terrorism (AML/CFT) …

Solving Global Financial Imbalances: A Plan For A World Financial Authority, Carlos Mauricio S. Mirandola

Northwestern Journal of International Law & Business

This paper will propose a plan to reform international finance—the World Financial Authority (WFA) Plan. Under such a plan, the IMF and other existing international financial institutions would be reformed and coordinated around a newly created WFA. The WFA would have two core functions. The first function would be to manage international liquidity, thus reducing externalities arising from domestic monetary policies adopted by its members, and addressing global liquidity problems involving financial activities of transnational private banks. The second function would be to help countries make their domestic monetary policies more effective, thus regaining traction and preventing contagion. A central …

The Revolving Door Of Emigration: The Economic Influences Of Remittances In Developing Countries, Laura L. Norris

Northwestern Journal of International Law & Business

Economic incentives play an integral role in many individuals' choices to leave their country of origin. While a person may independently make the decision to migrate, some governments have developed extensive programs to promote the export of workers. Developing nations often initiate such programs for the purpose of acquiring additional sources of foreign exchange and external financing, as emigrants in transnational families can play a critical role in development through remittances. Remittances to developing countries totaled $325 billion in 2010, and they will likely continue to increase along with emigration. The following Comment considers the palpable contribution remittances have on …

The Future Of Hedge Fund Regulation: A Comparative Approach: United States, United Kingdom, France, Italy, And Germany, Anne Riviere

Richmond Journal of Global Law & Business

No abstract provided.

Executive Pay Lessons From Private Equity, David I. Walker

Faculty Scholarship

Questions about the pay of public company executives – and, specifically, the structure of that pay – continue to dominate discussions regarding U.S. corporate governance. These concerns have been amplified by the recent financial meltdown. Some commentators suggest that the aggressive structure of executive pay packages – the heavy reliance on stock options – may have led to excessive risk taking at financial institutions that contributed to the collapse. Others have argued that incentive compensation has become a fetish in corporate America and that the heavy reliance on performance-based pay is no longer justified. More generally, Professor Frankel argues that …

Pay For Banker Performance: Structuring Executive Compensation For Risk Regulation, Frederick Tung

Faculty Scholarship

Excessive risk taking by firm managers did not originate with the Financial Crisis of 2007-08. Though bankers had special incentives to take big risks in the period before the Crisis, the incentive effects of equity-based compensation have been understood for some time. Among other things, equity compensation tends to induce greater risk taking by aligning managers’ risk preferences with those of equity holders. Longstanding government guaranties of bank liabilities additionally served to intensify bankers’ risk taking incentives.

I propose to ameliorate this gambler’s incentive with a new approach to compensation at the largest banks, one that explicitly accounts for the …

From The Schoolhouse To The Poorhouse: The Credit Card Act's Failure To Adequately Protect Young Consumers, Eboni S. Nelson

Faculty Publications

No abstract provided.

Review Of Seeds Of Destruction: Why The Path To Economic Ruin Runs Through Washington, And How To Reclaim American Prosperity, Michael S. Barr

Reviews

The United States has just gone through the worst financial crisis since the Great Depression. Our financial system came to brink of collapse, saved only by a massive intervention by the federal government. Although officially the Great Recession is now over, high unemployment and slow growth persist. Deficits that were ballooning in the 2000s with the weight of tax cuts, increased health care expenditures, and defense spending related to Iraq and Afghanistan, even before the financial crisis, have continued to climb, as lower tax receipts, automatic stabilizers, and fiscal stimulus kicked into gear.

Chapman Dialogue And Law Review Symposium Keynote Address: Ex Ante Versus Ex Post Approaches To Financial Regulation, Steven L. Schwarcz

Faculty Scholarship

Ideal financial regulation would work ex ante, to prevent financial failures. Once a failure occurs, there may already be economic damage, and it may be difficult to stop the failure from spreading and becoming systemic. The reality, though, is that preventing financial failures should be only one role for regulators. Even an optimal prophylactic regulatory regime cannot anticipate and prevent every failure. This paper, which formed my Chapman Dialogue Address at Chapman University School of Law and the keynote speech at Chapman Law Review’s 2011 Symposium on the Future of Financial Regulation, attempts to contrast fundamental differences between ex ante …

Capture In Financial Regulation: Can We Redirect It Toward The Common Good?, Lawrence G. Baxter

Faculty Scholarship

“Regulatory capture” is central to regulatory analysis yet is a troublesome concept. It is difficult to prove and sometimes seems refuted by outcomes unfavorable to powerful interests. Nevertheless, the process of bank regulation and supervision fosters a closeness between regulator and regulated that would seem to be conducive to “capture” or at least to fostering undue sympathy by regulators for the companies they oversee. The influence of very large financial institutions has also become so great that financial regulation appears to have become excessively distorted in favor of these entities and to the detriment of many other legitimate interests, including …

Political Risk And Sovereign Debt Contracts, Mitu Gulati, Stephen J. Choi, Eric A. Posner

Faculty Scholarship

Default on sovereign debt is a form of political risk. Issuers and creditors have responded to this risk both by strengthening the terms in sovereign debt contracts that enable creditors to enforce their debts judicially and by creating terms that enable sovereigns to restructure their debts. These apparently contradictory approaches reflect attempts to solve an incomplete contracting problem in which debtors need to be forced to repay debts in good states of the world; debtors need to be granted partial relief from debt payments in bad states; debtors may attempt to exploit divisions among creditors in order to opportunistically reduce …

Things Fall Apart: Regulating The Credit Default Swap Commons, Kristen N. Johnson

University of Colorado Law Review

Financial markets are an important national and international infrastructure resource that reflect attributes similar to the those that characterize commons, as described in property law literature. Through a case study examining the credit default swap market, this Article illustrates the analogy between financial markets and a traditional commons. After exploring the attributes of a commons, this Article examines the costs and benefits of the credit default swap market. Similar to a traditional commons, tragedy in financial markets occurs when market participants capture benefits while imposing the costs or negative externalities from their activities on other members of society. Commons scholars' …

Local To Global: Rethinking Spheres Of Authority After A World Financial Crisis: An Introduction, Franklin A. Gevurtz

McGeorge School of Law Scholarly Articles

No abstract provided.

Overwhelming A Financial Regulatory Black Hole With Legislative Sunlight: Dodd-Frank's Attack On Systemic Economic Destabilization Caused By An Unregulated Multi-Trillion Dollar Derivatives Market, Michael Greenberger

Journal of Business & Technology Law

No abstract provided.

Irs's Recent Uncertain Tax Positions Initiative: A Tangle Of Accounting, Tax And Privilege Issues, 9 Depaul Bus. & Comm. L.J. 401 (2011), Kathryn J. Kennedy

UIC Law Open Access Faculty Scholarship

Given the extremely limited source of resources available to the IRS in recent years, it's not surprising that it is exploring all sorts of avenues to increase its efficiency, particularly relying on corporate taxpayers to self report questionable tax positions. Under the banner of "corporate governance" and "transparency," the Service issued a series of proposals in 2010 requiring disclosure of uncertain tax positions ("UTPs") by corporate taxpayers. The Service essentially piggybacked on the recently imposed 2006 audit requirements that reserves be posted for contingent tax liabilities (i.e., tax positions that could later not be sustained, and therefore had to be …

Consumer Casualties, Amy J. Schmitz

Faculty Publications

On July 21, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank),' which among other things calls for creation of the Consumer Financial Protection Bureau (CFPB) to serve as a centralized agency charged with protecting consumers from lending abuses and improper practices. The question is when and whether this agency will come to fruition-or suffer as a casualty of political warfare.

Happiness In Business Or Law, Peter H. Huang

Publications

This article provides a short introduction to recent happiness research and its applications to business or law that is organized as follows. Section I briefly considers: (1) troubling and not so troubling reservations about happiness research, and (2) how money and happiness are related. Section II concisely surveys two sets of applications of happiness research to business, namely: (1) workplace well-being and meaning, and (2) marketing. Section III succinctly reviews two categories of happiness research implications for law: (1) business regulation, and (2) law student and lawyer happiness.

An Evolving Foreclosure Landscape: The Ibanez Case And Beyond, Peter R. Pitegoff, Laura S. Underkuffler

Faculty Publications

Mortgage securitization, subprime lending, a persistently weak housing market, and an explosion of residential mortgage defaults – today’s homeowners and banks face a new and challenging landscape. Recently, courts in several states have issued decisions that alter the terrain for mortgage foreclosures. In Massachusetts, New Jersey, and New York, among other states, courts have dismissed foreclosure actions on the basis of what might seem to be highly technical deficiencies in the pleading or proof. The most well-known–and controversial–in this cluster of cases is U.S. Bank National Ass’n v. Ibanez, decided by the Supreme Judicial Court of Massachusetts this year. In …

Is The Public Utility Holding Company Act A Model For Breaking Up The Banks That Are Too-Big-To-Fail, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

Derivatives: A Twenty-First Century Understanding, Timothy E. Lynch

Loyola University Chicago Law Journal

Derivatives are commonly defined as some variation of the following: financial instruments whose value is derived from the performance of a secondary source such as an underlying bond, commodity, or index. This definition is both over-inclusive and under-inclusive. Thus, not surprisingly, even many policy makers, regulators, and legal analysts misunderstand them. It is important for interested parties such as policy makers to understand derivatives because the types and uses of derivatives have exploded in the last few decades and because these financial instruments can provide both social benefits and cause social harms. This Article presents a framework for understanding modern …

A Vision For Scaling Microfinance: More Than Dollars And Smarts, Deborah Burand

Book Chapters

The following is a stock-taking of some of the key initiatives that have taken place to date in the world of microfinance at building an international financial architecture that attracts and retains flows of commercial capital to microfinance. It also is a call to those of us in the microfinance world to do much, much more.

A Behavioral Framework For Securities Risk, Tom C.W. Lin

UF Law Faculty Publications

This article provides the first critical analysis and redesign of the existing securities risk disclosure framework given new insights from the emerging, interdisciplinary field of behavioral economics. Disclosure is the principle at the heart of federal securities regulation. Beneath that core principle of disclosure is the basic assumption that the reasonable investor is the idealized über-rational person of neoclassical economic theory. Therefore, once armed with the requisite information investors presumably can protect themselves through rational choice. Descriptively, however, real investors are not like their rational, neoclassical kin. This article examines this incongruence between the idealized rational investor and the imperfect …

Open Government And The Implementation Of The Dodd-Frank Act, Caroline Bradley

Articles

No abstract provided.

Living Wills And Pre-Commitment, Adam Feibelman

American University Business Law Review

No abstract provided.

Financial Regulation Reform And Too Big To Fail, Brett Mcdonnell

American University Business Law Review

No abstract provided.

Regulating Informational Intermediation, Onnig H. Dombalagian

American University Business Law Review

No abstract provided.