Banking and Finance Law Commons^™

Rolling The Dice On Financial Regulatory Reform: Gambling Law As A Framework For Regulating Structured Investments, Christopher B. Chuff

Jeffrey S. Moorad Sports Law Journal (1994 - )

No abstract provided.

Consultation And Legitimacy In Transnational Standard-Setting, Caroline Bradley

Articles

No abstract provided.

Ferdinand Pecora: The Hellhound Of Wall Street, Michael A. Perino

Faculty Publications

Few Americans today know who Ferdinand Pecora was, although he was once a media superstar, a nearly daily fixture in newspapers and radio broadcasts across the country. With the onset of our current economic woes his name has slowly begun to crop up again. In April 2009, House Speaker Nancy Pelosi called for a new "Pecora Commission" to investigate "what happened on Wall Street." The next week, the Senate invoked Pecora's name in voting to create an independent committee to investigate the financial crisis, and in January 2010 the Financial Crisis Inquiry Commission held its first hearings.

Pecora, a diminutive …

Ask The Professor: “Omg! What Did Mf Global Do?, Ronald Filler

Articles & Chapters

This paper, written one week after MF Global, a large futures brokerage firm filed for bankruptcy, analyzes the bankruptcy, its impact on futures customers and the shortfall in customer funds that occurred on October 31, 2011. Subsequent to MF Global's bankruptcy, several customer protection rules were amended by the U.S. Commodity Futures Trading Commission and the National Futures Association.

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' …

Empathy's White Elephant: Responding To The Subprime Mortgage Crisis Without Denigrating The Poor, Adam J. Macleod

Faculty Articles

Empathy is the new coverture. Before state legislatures abolished it in the nineteenth century, the plea of coverture nullified any attempts by a married woman to exercise sovereignty over her property. Just as coverture did to married women, the now-well-known call for empathy in our nation's judgments threatens to deny poor borrowers, as a class, the freedom and responsibility to manage their assets. Empathy, as the ideal judge would employ it, would impede the agency of, and thus denigrate, persons within that class. The injustice (and ground for the ultimate abolition) of coverture arose from its failure to respect women …

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.

Beyond Profit: Rethinking Corporate Social Responsibility And Greenwashing After The Bp Oil Disaster, Miriam A. Cherry, Judd F. Sneirson

All Faculty Scholarship

The explosion of the BP-leased Deepwater Horizon and subsequent oil spill stands as an indictment not just of our national energy priorities and environmental law enforcement; it equally represents a failure of Anglo-American corporate law and what passes for corporate social responsibility in business today. Using BP and the disaster as a compelling case study, this Article examines green marketing and corporate governance and identifies elements of each that encourage firms to engage only superficially in corporate social responsibility yet trumpet those efforts to eager consumers and investors. The Article then proposes reforms and protections designed to increase corporate social …

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 …

Ability To Pay, John A. E. Pottow

Articles

The landmark Dodd-Frank Act of 2010 ("Dodd-Frank") transforms the regulation of consumer credit in the United States. Many of its changes have been high-profile, attracting considerable media and scholarly attention, most notably the establishment of the Consumer Financial Protection Bureau ("CFPB"). Even specific consumer reforms, such as a so-called "plain vanilla" proposal, drew hot debate and lobbying firepower. But when the dust settled, one profoundly transformative innovation that did not garner the same outrage as plain vanilla or the CFPB did get into the law: imposing upon lenders a duty to assure a borrower's ability to repay. Ensuring a borrower's …

Evolving Executive Equity Compensation And The Limits Of Optimal Contracting, David I. Walker

Faculty Scholarship

Executive equity compensation in the U.S. is evolving. At the turn of the millennium, stock options dominated the equity pay landscape, accounting for over half of the aggregate ex ante value of senior executive pay at large public companies, while restricted stock and similar compensation accounted for only about ten percent. Beginning in 2006, stock grants have displaced options as the single largest component of senior executive compensation at these firms. Accompanying this shift has been increased variation among companies in their relative emphasis on stock and options in equity pay packages. Both phenomena provide an opportunity for a rich …

Risk, Speculation, And Otc Derivatives: An Inaugural Essay For Convivium, Lynn A. Stout

Cornell Law Faculty Publications

Speculative trading, including speculative trading in derivatives, is often claimed to provide social benefits by decreasing risk and improving the accuracy of market prices. This assumption overlooks the possibility that speculation can be driven not just by differences in traders' risk aversion and information investments, but also by differences in traders' subjective expectations. Disagreement-based speculation erodes traders' returns, increases traders' risks, and can distort market prices. There is reason to believe that by 2008, the market for OTC derivatives may have been dominated by disagreement-based speculation that contributed to the Fall 2008 credit crisis.

Old Enough To Fight, Old Enough To Swipe: A Critique Of The Infancy Rule In The Federal Credit Card Act, Andrew A. Schwartz

Publications

In the 1960s and 1970s, American society came to the considered conclusion that if eighteen-year-olds can be drafted to fight and possibly die for their country, they should be treated as adults under the law. Thus, in 1971, the Twenty-Sixth Amendment to the United States Constitution, which lowered the voting age to eighteen from twenty one, was proposed and ratified in just three months, making it the fastest amendment in American history. The minimum age for federal and state jury service was also lowered to eighteen from twenty one. And, with regard to contract law, every state passed legislation reducing …

Deconstructing Lyondell: Reconstructing Revlon, Lawrence Lederman

Articles & Chapters

No abstract provided.

Global Finance, Multinationals And Human Rights: With Commentary On Backer’S Critique Of The 2008 Report By John Ruggie, Faith Stevelman

Faculty Articles

This article references the excellent article of Larry Cata Backer, as it provides an analysis of the 2008 Report's "Protect, Respect, Remedy" (PRR) framework. Ruggie's most recent efforts, reflected in the 2010 Report, are directed at operationalizing the PRR framework set forth in the 2008 Report. Both these reports have been vetted internationally amongst governments, lawyers, academics and human rights advocates. How will governments, corporations, trade associations and rights advocates conceptualize and construct the fora and modes of recourse available to persons aggrieving human rights abuses? That question is the central focus of the 2010 Report and, as such, lies …

Is It Greek Or Déjà Vu All Over Again?: Neoliberalism And Winners And Losers Of International Debt Crises, Tayyab Mahmud

Faculty Articles

The global financial meltdown and the Great Recession of 2007-2009 have brought into sharp relief the uneven distribution of gain and pain during economic crises. The 2009-2010 debt crisis in Greece resulted in a windfall for financial institutions at the expense of taxpayers, a rollback of welfare systems, and the impoverishment of the working classes. This outcome is consistent with the pattern that has emerged in the international debt crises of the last three decades, including the Latin American crisis during the 1980s and the Asian crisis during the 1990s.

The recurrent international debt crises of the last three decades …

Prudential, Pragmatic And Prescient, Reform Of Bank Resolution Schemes, Janis P. Sarra

All Faculty Publications

The 2008-2009 global financial crisis highlighted the interdependency of financial institutions and markets worldwide. Globally, fiscal support packages totaling 3 trillion USD were introduced, placing enormous strain on the public finances of a number of countries. Even in jurisdictions such as Canada, with relatively well-managed banking systems, a generalized loss of confidence led to a sharp rise in funding costs. The largest negative effects of the financial crisis on the Canadian economy stemmed from crises originating in other countries, with adverse contagion effects on the Canadian banking system, making it very difficult for Canadian banks to fund themselves in foreign …

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), …

A Model Of Optimal Corporate Bailouts, Antonio E. Bernardo, Eric L. Talley, Ivo Welch

Faculty Scholarship

We analyze incentive-efficient government bailouts within a canonical model of intra-firm moral hazard. Bailouts exacerbate the moral hazard of firms and managers in two ways. First, they make them less averse to failing. Second, the taxes to fund bailouts dampen their incentives. Nevertheless, if third-party externalities from keeping the firm alive are strong, bailouts can improve welfare. Our model suggests that governments should use bailouts sparingly, where social externalities are large and subsidies small; eliminate incumbent owners and managers to improve a priori incentives; and finance bailouts through redistributive taxes on productive firms instead of forcing recipients to repay in …