Banking and Finance Law Commons^™

Too Woke To Fail? Esg And Silicon Valley Bank's Demise, Xuan-Thao Nguyen

Washington Law Review

The anti-Environmental, Social, and Governance (ESG) movement is unfolding in many states as part of the new culture wars. When Silicon Valley Bank (SVB) collapsed in March of 2023, ESG was named as the cause. Corporations, particularly those operating in the financial and banking sector, are justifiably concerned about attracting negative attention from the anti-ESG movement.

This Article posits that the ESG embraced by the financial sector, particularly by banks operating in the venture capital and startup ecosystem, is both timely and necessary. Despite the fierce attack against ESG as seen through a series of state laws and regulations passed …

Regulating Robo-Advisors In An Age Of Generative Artificial Intelligence, Daniel Schwarcz, Tom Baker

Law & Economics Working Papers

New generative Artificial Intelligence (AI) tools can increasingly engage in personalized, sustained and natural conversations with users. This technology has the capacity to reshape the financial services industry, making customized expert financial advice broadly available to consumers. However, AI’s ability to convincingly mimic human financial advisors also creates significant risks of large-scale financial misconduct. Which of these possibilities becomes reality will depend largely on the legal and regulatory rules governing “robo-advisors” that supply fully automated financial advice to consumers. This Article consequently critically examines this evolving regulatory landscape, arguing that current U.S. rules fail to adequately limit the risk that …

Taxing Crypto-Asset Transactions: Foundations For A Globally Coordinated Approach, Vincent Ooi

Research Collection Yong Pung How School Of Law

With the total market capitalisation of crypto-assets amounting to trillions of US dollars, it isclear that crypto taxation needs to be taken seriously by both tax administrations and taxpayers.Over the past few years, numerous tax administrations around the world have devoted resourcesto crypto taxation, as evidenced by the substantial amount of guidance that has been madeavailable to taxpayers. International organisations such as the Organisation for EconomicCo-operation and Development (OECD) and the United Nations have also released publicationson crypto taxation. Despite all these domestic and international efforts to provide guidance oncrypto taxation, there remains considerable uncertainty as to the tax treatment …

Regulatory Approaches To Consumer Protection In The Financial Sector And Beyond: Toward A Smart Disclosure Regime?, Nydia Remolina Leon, Yvonne Ai-Chi Loh, David R. Hardoon

Research Collection Yong Pung How School Of Law

Traditionally, consumer and data protection policies evolved from issues of consent and information disclosure. The purpose of these regulatory approaches is the protection of consumers by reducing some contracting failures, such as asymmetries of information and a lower bargaining power, especially in transactions involving complex issues such as financial products and sensitive personal data. In the past, regulators have responded to privacy and consumer protection by adopting what this paper refers to as an “imperfectly informed regime”, in which consumers do not receive full information about the risks associated with their decisions, even if they are still protected through a …

Emerging Compliance In The Generative Decentralized Era, Nizan Geslevich Packin

Brooklyn Journal of Corporate, Financial & Commercial Law

Is it the end of compliance as we know it? Emerging technologies such as Artificial Intelligence (“AI”), including Generative AI (“GenAI”), and blockchain are reshaping regulatory compliance in the Web 3.0 era. As machine-generated data becomes the norm, traditional models reliant on human oversight are becoming obsolete, necessitating swift adaptation from regulators and industry stakeholders. Historically, compliance was designed to be managed by humans due to the need for critical thinking, ethical considerations, and nuanced decision-making. Yet, in today’s era, this approach is no longer viable. Addressing this need, Regulatory Technology (“RegTech”) has played a key role in modernizing compliance …

The Case For Stronger Scrutiny Of The Deductibility Of Crypto Losses, Vincent Ooi

Research Collection Yong Pung How School Of Law

My paper, The Case for Stronger Scrutiny of the Deductibility of Crypto Losses, which was recently published by The Journal of Tax Administration, discusses the issue of crypto losses and risks to the tax base. It submits that tax authorities and national legislatures should step up their scrutiny of the deductibility of crypto losses and proposes some ways in which this can be done in practice.

The Case For Stronger Scrutiny Of The Deductibility Of Crypto Losses, Vincent Ooi

Research Collection Yong Pung How School Of Law

Crypto losses have the potential to adversely impact the tax base, particularly if they are deducted against income from other profitable sources. There is a key question of fairness as to whether crypto losses should be cross-subsidised by income from other sources that may have nothing to do with cryptoassets at all. This article argues for stronger scrutiny of the deductibility of crypto losses at the stage of determining whether such losses can be set off against income from other sources or at the stage of the shifting of the losses across time and between companies. It explains why crypto …

Tech-Savvy Fraud Investigators In An Age Of Digital Deception, Alan Saquella

Publications

The recent court conviction of cryptocurrency exchange founder Sam Bankman-Fried on charges of fraud and conspiracy related to the collapse of FTX has heightened the critical need for the next generation of fraud investigators to possess advanced technical skills. This high-profile case serves as a main indicator in the fight against white-collar crime and emphasizes the glaring reality that traditional investigative methods are no longer sufficient to fight modern-day financial bad behavior. As we witness an increase in white-collar crime on a global scale, the pressure for a new generation of fraud investigators, fortified with an advanced skill set, has …

Brief Of Banking And Administrative Law Scholars As Amici Curiae In Support Of Appellants/Cross-Appellees, Jeffrey Lubbers

Amicus Briefs & Court Filings

Amici have a strong interest in how this Court’s decision will affect the fields of banking and administrative law and the enforcement of banking regulation. Amici seek to assist this Court in resolving questions of law that arise in the core of their professional expertise and scholarship, namely the scope of the Seventh Amendment as applied to the Federal Deposit Insurance Corporation’s authority to regulate and adjudicate unsafe or unsound practices in the operation of banks.

The Federal Judiciary's Double Standard: How The Fsia Deters Plaintiffs In Their Search For Justice, Chance Easterling

MC Law Review

No abstract provided.

Reimagining Bankruptcy For Cryptocurrency Platforms: Frameworks To Protect Cryptocurrency Investors, Natalia Plichta

Chicago-Kent Law Review

No abstract provided.

Central Bank Undersight: Assessing The Fed’S Accountability To Congress, Andrew T. Levin Professor Of Economics, Christina Parajon Skinner Assoc. Professor

Vanderbilt Law Review

As America’s central bank, the Federal Reserve (“Fed”) is unique among independent agencies in exercising powers that the U.S. Constitution granted to the legislative branch—namely, regulating the value of money and borrowing funds directly from the public. In delegating these powers, Congress designed the Fed to ensure that its monetary policy decisions would be insulated from political interference. Furthermore, Congress has a constitutional obligation to maintain effective oversight of the Fed’s exercise of these duties. Over the past fifteen years, however, the scope and complexity of monetary policy has outpaced Congress’s ability to monitor these policies through existing mechanisms of …

A Threshold Test For Fed Activism, John Crawford

William & Mary Business Law Review

Recent years have witnessed robust academic and policy debates about the scope of issues the U.S. central bank, the Federal Reserve (the Fed), should attempt to tackle. Some propose expanding the Fed’s remit to help address societal problems like racial inequality and climate change, either through a broader interpretation of the Fed’s current mandate, or through new legislation explicitly delegating new responsibilities to the Fed. Others argue that the Fed should “stay in its lane,” with a particular focus on ensuring democratic accountability and a tighter fit between what the Fed does and what it is statutorily authorized to do. …

The Promise And Perils Of Debtor-In-Possession Financing: Lessons From The United States, Kenneth Ayotte, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

The ability of viable but financially distressed firms to obtain new financing to keep operating and pursuing value-creating projects is one of the most critical aspects for a successful reorganisation. Unfortunately, when a company becomes insolvent, lenders are rationally skeptical to extend credit. To address this problem, the United States Bankruptcy Code adopted a system, known as debtor-in-possession (‘DIP’) financing, that seeks to encourage lenders to extend credit to financially distressed firms.[1] This is done by providing DIP lenders with different forms of priority that may include a new lien, a junior lien, a senior lien, an administrative expense priority, …

Addressing Governance Challenges Of Digitalisation And Sustainability: The Case Of Central Bank Digital Currency, Heng Wang

Research Collection Yong Pung How School Of Law

Digitalisation and environmental sustainability are widely discussed topics. However, their nexus remains underexplored and can pose significant challenges for governments and industries alike. The environmental implications of digitalisation are becoming increasingly pertinent with the advent of central bank digital currencies (CBDCs) and their inherent energy consumption and production of e-waste. On the other hand, digitalisation could potentially support sustainability efforts. This begs the question of how systems of governance, such as regulatory frameworks and internal organisational governance, should harmonise digitalisation and sustainability goals. Such harmonisation entails ensuring that digitalisation processes are environmentally responsible while exploring how the application and features …

Professor Anthony J. Santoro Business Law Lecture Series: Navigating The Impact Of Cfius On M&A And Investment Activity 10/17/24, Roger Williams University School Of Law

School of Law Conferences, Lectures & Events

No abstract provided.

When The Bank Wants Its Borrower In Bankruptcy: Benefits Of Bankruptcy For Lenders And Lender Liability Defendants, David C. Hillman, Matthew L. Caras

Maine Law Review

Bankruptcy features such as the automatic stay and the avoidance powers have traditionally caused lenders to look with disfavor upon the commencement by a borrower of a case under the Bankruptcy Code and have caused lenders to consider only as a last resort the alternative of exercising their right to commence an involuntary bankruptcy against a borrower. Yet circumstances exist where lenders might obtain substantial benefits and advantages from dealing with a problem loan in the context of a borrower's bankruptcy case, particularly in light of the increasing number of lender liability lawsuits that have been initiated during the past …

Maine Debtor-Creditor Law By Dennis M. Patterson, David J. Jones

Maine Law Review

Dennis M. Patterson, Esquire, has written a brief, practical guide to selected areas of collection practice entitled Maine Debtor-Creditor Law. Two immediate observations come to mind: first, that I plan to keep a copy of the book in my office library for future reference; second, that I am disappointed that the author omitted reference to several challenging issues that confront the attorney having a regular collection or foreclosure practice. This latter observation is both an indication of the usefulness of the book's treatment of the areas covered and a hopeful invitation to the author to expand on his subject matter …

A Reply To David Jones, Dennis M. Patterson

Maine Law Review

During my years of practice in Maine, I had the pleasure of litigating most of the issues discussed in my book, Maine Debtor-Creditor Law, with many members of Maine's fine commercial and bankruptcy law bar. Among the lawyers with whom I litigated these questions is David Jones. In fact, one of the cases we litigated, a particularly thorny foreclosure action, was the impetus of an article that became portions of two of the chapters in my book. It is against this background that I was pleased to learn that one of my old adversaries from practice had agreed to review …

Lessons Learned: Martín Redrado, Vincient Arnold

Journal of Financial Crises

Martín Redrado was appointed president of the Central Bank of Argentina by President Néstor Kirchner in 2004 and oversaw measures to manage the external shocks of the Global Financial Crisis of 2007–09. He resigned in 2010 after President Cristina Fernández de Kirchner tried to remove him over a dispute regarding the use of the bank’s reserves to fund the government. After leaving the bank, Redrado authored the book No Reserve: The Limit of Absolute Power, which argues against the danger of mixing politics and economics. He is currently a director of the think tank Fundación Capital and most recently was …

Lessons Learned: Alfred Dellibovi, Maryanne Chute Lynch, Rosalind Z. Wiggins

Journal of Financial Crises

The Yale Program on Financial Stability (YPFS) interviewed Alfred DelliBovi about his tenure as president and chief executive officer of the Federal Home Loan Bank of New York leading up to and during the Global Financial Crisis of 2007–09 (GFC). The Federal Home Loan Banks (FHLBs) played a critical and unexpected lending role for their member banks at the start of the crisis. DelliBovi remained in his position for 21 years, until 2014. Before moving to the FHLB, DelliBovi had served as deputy secretary at the United States Department of Housing and Urban Development (HUD) from 1989 to 1992, in …

Policy Note | Weekly Fed Report Still Drives Discount Window Stigma, Steven Kelly

Journal of Financial Crises

As banking regulators work to destigmatize the Federal Reserve’s discount window—and fervently so since the 2023 banking crisis—they’ve pointed to several potentially fruitful policy routes. These have included supervisory improvements, regulatory changes, and operational enhancements by both the banks and the Fed. Left off the menu so far have been changes to the Fed’s weekly publications that reveal up-to-date discount window borrowing data by regional geography. Reforms following the Global Financial Crisis of 2007–2009 have made mandatory the disclosure of discount window borrowers on a two-year lag—higher transparency than previously when no disclosure was required. However, bigger banks, such as …

Policy Note | Discount Window Stigma: What's Design Got To Do With It?, Susan Mclaughlin

Journal of Financial Crises

This article utilizes discount window transaction data, which the Federal Reserve began disclosing in 2010, to assess how the Fed’s 2003 redesign of the discount window has affected banks’ use of the window. The data show that while the discount window remains stigmatized and relatively little used outside periods of funding market stress, secondary credit has at times played a role in supporting bank recovery and resolution, as envisioned by the 2003 redesign. This development raises a policy question: has the two-tiered design of the discount window implemented in 2003, in which a lending facility for sound banks operates alongside …

United States: Citigroup Capital Injection, 2008, Benjamin Hoffner, Vincient Arnold

Journal of Financial Crises

During the first three weeks of November 2008, Citigroup’s stock price dropped almost 80%, and its credit default swap spreads spiked as the market lost confidence in the bank’s ability to honor its commitments. Counterparties pulled away, and regulators determined Citi’s failure would constitute a systemic risk. On November 23, 2008, the Treasury, Federal Reserve Board, and Federal Deposit Insurance Corporation announced a package of measures to rescue Citi, which included an Asset Guarantee Program (AGP) to cover $306 billion in Citi’s assets and an ad hoc capital injection—the Targeted Investment Program (TIP). Under the guarantee, Citi would absorb the …

Russia: Otkritie Bank Restructuring, 2017, Benjamin Hoffner

Journal of Financial Crises

In July and August 2017, Otkritie Bank, Russia’s largest privately owned bank, experienced a deposit run related to concerns over Otkritie’s recent acquisitions. The run prompted Otkritie’s shareholders to approach the Central Bank of Russia (CBR) for assistance. On August 29, 2017, the CBR announced a rescue plan for Otkritie. In it, the CBR pledged to become Otkritie’s main investor using a newly created resolution mechanism wherein the CBR would take at least a 75% equity stake using funds from the Fund for Banking Sector Consolidation, a subdivision of the CBR. The CBR simultaneously appointed a provisional administration, composed of …

United States: Bank Of America Capital Injection, 2009, Benjamin Hoffner, Vincient Arnold

Journal of Financial Crises

On September 15, 2008, Bank of America (BofA) announced a merger with the investment bank Merrill Lynch. In December, BofA learned that Merrill Lynch had experienced large, unexpected losses amounting to $15.5 billion during the fourth quarter of 2008. In light of these losses, BofA’s CEO informed the US Treasury secretary and Federal Reserve chairman that BofA intended to invoke the material adverse change clause of the merger agreement, allowing for a renegotiation of, or escape from, the merger. Officials at the Fed and Treasury warned BofA that a failure of the merger would have adverse consequences for BofA and …

Switzerland: Ubs Capital Injection, 2008, Anmol Makhija

Journal of Financial Crises

UBS, the eighth-largest bank in the world and the largest bank in Switzerland in 2008, incurred write-downs totaling USD 50 billion during the Global Financial Crisis, mostly on exposures to securities linked to US subprime mortgages. On October 16, 2008, the Swiss Federal Council announced that the government would subscribe to CHF 6 billion (USD 5.3 billion) of mandatory convertible notes (MCNs) issued by UBS to restore confidence in the bank and the financial system. UBS agreed to use the government’s capital to fund the equity for a special purpose vehicle, StabFund, that the central bank created to take over …

Switzerland: Schweizerische Volksbank Capital Injection, 1933, Anmol Makhija

Journal of Financial Crises

Schweizerische Volksbank, or Swiss People’s Bank, grew to be the second-largest bank in Switzerland by 1930, when its balance sheet peaked at 1.7 billion Swiss francs (CHF). Beginning in 1929, nonperforming assets weighed on Volksbank’s profitability. By 1933, the bank faced losses on CHF 118.5 million in assets, representing approximately 10% of total assets. The government provided liquidity in the form of loans and deposits to Volksbank in 1931 and again in 1933 until it could finalize a capital injection. In 1933, the government determined that Volksbank was too important to the national economy to allow its failure. As owners …

Spain: Caja De Ahorros Castilla–La Mancha Capital Injection, 2009, Lakshimi Swaminathan, Vincient Arnold

Journal of Financial Crises

Caja de Ahorros Castilla–La Mancha (CCM) was a small Spanish savings bank with just 1% market share in deposits and loans. Following years of rapid credit expansion in the real estate sector and reliance on wholesale funding markets to carry out its operations between 2000 and 2008, CCM found itself on the brink of insolvency in early 2009, with a Tier 1 capital ratio of just 1.3%, compared with the 8% regulators required. The authorities placed the bank under administration in 2009. Consequently, the Spanish Savings Bank Deposit Guarantee Fund (Fondo de Garantía de Depósitos de Ahorros, or FGD) agreed …

Portugal: Banco Espírito Santo Capital Injection, 2014, Salil Gupta, Shavonda Brandon

Journal of Financial Crises

Banco Espírito Santo (BES) was the second-largest private bank in Portugal in 2014, with assets of EUR 80 billion (USD 81 billion). A capital increase of EUR 1.1 billion to the BES was concluded on market terms in June 2014. The Bank of Portugal (BOP) adopted a resolution measure for BES on August 3, 2014, to safeguard financial stability by protecting all depositors and ensuring continuation of operating activities of the bank. The Portuguese Resolution Fund provided equity capital of EUR 4.9 billion to a bridge bank, Novo Banco, with 100% public ownership and the expectation of sale to private …