Banking and Finance Law Commons^™

Rebuilding Trust: Regulation Of Financial Advisers In The Uk, Weiping He, Han-Wei Liu

Research Collection Yong Pung How School Of Law

Key pointsThe 2006 UK Retail Distribution Review identified much-needed reforms to the retail investment markets. It suffered chronic problems arising from the provision of conflicted advice by financial advisers to their clients. The global financial crisis (GFC) added intense urgency to the need for reforms.As a result, commission-based charging for financial advisers were banned in 2012, and the requirements under the suitability rule were more sharply defined.This article traces the trajectory of the pre- and post-GFC reforms and the ways in which the judicial interpretations of the legislative reforms played an important role in regulating the retail investment markets.The article …

Corporate Venture Capital, Darian M. Ibrahim

Faculty Publications

This Article makes the case for corporate venture capital as a potentially game-changing entrant into entrepreneurial finance. Part II begins by retracing the ancillary players in entrepreneurial finance and their roles in the startup ecosystem. After finding each of them incapable of denting the venture capitalist’s current dominance, Part III introduces the large corporation as venture capitalist. Part III discusses the growing scale of corporate venture capital and why it may be desirable for startups, innovation, and society as a whole. Part IV looks at legal differences that may become important for corporate venture capitalists to consider, including securities, antitrust, …

Two Steps Forward, One Step Back: How New York’S Bail Reform Saga Tiptoes Around Addressing Economic Inequality, Daniel Chasin

Cardozo Law Review

No abstract provided.

Towards A Data-Driven Financial System: The Impact Of Covid-19, Nydia Remolina Leon

Research Collection Yong Pung How School Of Law

The COVID-19 outbreak has a growing impact on the global economy and the financial sector, which plays a critical role in mitigating the unprecedented macroeconomic and financial shock caused by the pandemic. Given the unprecedented nature of the current crisis, financial regulators and supervisors, central banks, along with governments and legislatures face challenges to maintain financial stability, preserve the well-functioning core markets, and ensure the flow of credit to the real economy. Even though the COVID-19 has slowed down our daily lives and stopped the operation of many industries, it did not have the same effect in the data-driven finance …

Changing The Student Loan Dischargeability Framework: How The Department Of Education Can Ease The Path For Borrowers In Bankruptcy, Pamela Foohey, Aaron S. Ament, Daniel A. Zibel

Articles

The United States' consumer bankruptcy system supposedly gives "honest but unfortunate" individuals "a new opportunity in life with a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt." Access to bankruptcy's discharge of debt is especially important in the wake of the COVID-19 pandemic, which has resulted in a once-in-a-century economic crisis that is projected to increase bankruptcy filings by people struggling to recover. Those who file bankruptcy will find a system that is already difficult to navigate and has long-recognized racial and gender disparities in access and outcomes.

Student loan borrowers will find a …

Digital Euro, Monetary Objects, And Price Stability: A Legal Analysis, Corinne Zellweger-Gutknecht, Benjamin Geva, Seraina Neva Grünewald

Articles & Book Chapters

The Eurosystem is mandated to safeguard price stability according to article 127 of the Treaty on the Functioning of the European Union (TFEU). Based on a theoretical and policy-oriented approach, this article sheds light on a second public good with enormous practical relevance both for financial markets and institutions as well as for the general public that the Eurosystem, and ultimately the European Central Bank (ECB), must safeguard according to article 128 TFEU: the availability of ideal monetary objects for the public.While monetary policy constitutes the instrument used to keep prices stable, the availability of ideal monetary objects is ensured …

Constructing The Yellow Brick Road: Preventing Discrimination In Financial Services Against The Lgbtq+ Community, Cyrus Mostaghim

Michigan Business & Entrepreneurial Law Review

The Lesbian, Gay, Bisexual, Transgender, Queer, and Questioning (“LGBTQ+”) community lacks explicit statutory protections from discrimination in financial services. After the Supreme Court held in Bostock that employment discrimination based on sexual orientation or gender identity was illegal, the Consumer Financial Protection Bureau (CFPB) issued an informal interpretive rule for the Equal Credit Opportunity Act (ECOA) and Regulation B that made discrimination in the access to credit based on sexual orientation or gender identity illegal.

However, this article argues that an informal interpretive rule is easily rescinded and does not provide sufficient protection. Thus, alternative action is needed to create …

Theory, Evidence, And Policy On Dual-Class Shares: A Country-Specific Response To A Global Debate, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

Dual-class shares have become one of the most controversial issues in today´s capital markets and corporate governance debates around the world. Namely, it is not clear whether companies should be allowed to go public with dual-class shares and, if so, which restrictions (if any) should be imposed. Three primary regulatory models have been adopted to deal with dual-class shares: (i) prohibitions, existing in countries like the United Kingdom, Germany, Spain, Colombia, or Argentina; (ii) the permissive model adopted in several jurisdictions, including Canada, Sweden, the Netherlands, and particularly the United States; and (iii) the restrictive approach recently implemented in Hong …

Winning, Defined? Text-Mining Arbitration Decisions, Charlotte S. Alexander, Nicole G. Iannarone

Cardozo Law Review

Who wins in consumer arbitration? Historically, this question has been nearly impossible to answer, as most arbitration proceedings are a private black box, and arbitral forums release only limited summary statistics. One exception is the Financial Industry Regulatory Authority (FINRA), which arbitrates virtually all disputes between investors and stockbroker-dealers, and makes all of its nearly 60,000 written arbitration decisions publicly available in an online database. This Article is the first to use computational text analysis tools to study these decisions, and to construct a measure of the claimants’ win, loss, and settlement rates. It is the first installment in an …

Reallocating Redevelopment Risk, Michael C. Pollack

Articles

Scores of cities across the country face devastating financial crises, and the COVID-19 pandemic has brought even more to the brink. But economically distressed municipalities have few places to turn for help. Saddled by rising unemployment, weak tax bases, and state law limitations on deficit spending and debt assumption, they generally cannot spend their way out. And as conditions deteriorate, mobile capital and labor move to greener pastures, further hollowing out the cities they leave behind. With state and federal lifelines tenuous at best, offers by large developers to redevelop an area of the city can thus appear to be …

The Mysterious Market For Post-Settlement Litigant Finance, Ronen Avraham, Lynn A. Baker, Anthony J. Sebok

Articles

Litigant finance is a growing and increasingly controversial industry in which financial firms advance a plaintiff money in exchange for ownership rights in the proceeds of the legal claim on a nonrecourse basis: A plaintiff must repay the advance only if compensation is ultimately received for the legal claim. The nonrecourse nature of this funding exempts it from most states’ consumer credit laws, enabling funders to charge higher interest and fees than would otherwise be permitted. When this funding involves ordinary consumers, critics of the industry contend that the uncapped interest rates exploit vulnerable litigants, while its defenders argue that …

Wells Fargo & Co. V. U.S.: A Potential Beginning Of The End Of The Objective Reasonable Basis Tax Penalty Defense, Beckett G. Cantley, Geoffrey C. Dietrich

University of Miami Business Law Review

The Internal Revenue Code (“IRC”) § 6662(a) permits the IRS to impose a twenty-percent (20%) accuracy-related penalty to an underpayment of tax, and there are several different defenses to this penalty depending on the facts of the case and the reason for the penalty.3 One of the most common accuracy-related penalties is the negligence penalty.4 Although there are multiple different reasons for the application of an accuracy-related penalty, only one penalty may be applied for each understatement.5 If a taxpayer faces the negligence penalty, one common defense is that the taxpayer’s return position has a reasonable basis under the relevant …

The Role Of Expropriation Clauses In Protection And Promotion Of Foreign Investments In Renewable Energy: An Essential But Overlooked Legal Consideration, Moosa Akefi Ghaziani, Mohammad Akefi Ghaziani

Indonesia Law Review

Today the world is tackling climate change. The global threat of energy poverty along with the growing need for energy has escalated this crisis. The promotion of renewable energy sources is widely known as the main solution to this challenge. Many International and regional agreements address various aspects of renewable energy development such as trade, transit, security, and investment. Foreign investment is recognised as a crucial prerequisite for the global deployment of renewable energy, since not all States have the financial and technological potentials to develop this sector. Various investment agreements are signed to facilitate and promote investments. These instruments …

Innovation Meets Regulation: Firrma’S Significance, The Treasury’S Dilemma, And The New Normal For Foreign Investment In The U.S. Venture Capital Ecosystem, Jonathan Aaron Horn

Pepperdine Law Review

One of the most powerful entities in the federal government is the little-known Committee on Foreign Investment in the United States (CFIUS), which is responsible for reviewing foreign investment transactions with U.S. businesses for potential national security threats. Originally, CFIUS was only able to review foreign investments that resulted in control of the U.S. company at issue, but the Foreign Investment Risk Review Modernization Act (FIRRMA) has significantly enhanced CFIUS’s scope to include review of minority investments. This Comment explores FIRRMA’s impact on foreign investment into the U.S. venture capital (VC) ecosystem and evaluates the uncertainty created for startups and …

Digital Euro And Ecb Powers, Seraina Neva Grünewald, Corinne Zellweger-Gutknecht, Benjamin Geva

Articles & Book Chapters

The use of cash in the euro area is declining. Accordingly, the EuropeanCentral Bank is exploring options for the design of a digital euro as a form of central bank money available to the public. This article addresses the key question of whether the Eurosystem is empowered to issue a digital euro and, if so, in what form. Based on a historical, teleological, and systematic interpretation, it argues that Article 128(1) TFEU serves as both a source of competence for the Eurosystem to issue a digital euro and a limitation to that competence. The Eurosystem’s powers are necessarily exclusive and …

Central Bank Of The Future Summary And Recommendations For Further Inquiry, Michael S. Barr, Adrienne A. Harris, Megan Kelly, Emma Macfarlane, Bryan Ricketts

Other Publications

Over the past two years, the University of Michigan’s Gerald R. Ford School of Public Policy and its Center on Finance, Law & Policy, with support from the Bill and Melinda Gates Foundation, has embarked on an exploration of the Central Bank of the Future. The project convened current and former central bank governors, policymakers, regulators, researchers, innovators, entrepreneurs, consumer and community organizations, non-profit think tanks, and others for two large, public conferences, three private roundtables, and dozens of small group and one-on-one discussions and interviews. The project also produced an introductory paper, seven working papers, a comprehensive data set …

Climate Change As Systemic Risk, Barnali Choudhury

Articles & Book Chapters

Hindsight tells us that COVID-19, thought by former President Trump and others to have come out of nowhere, is more aptly labelled a “gray rhino” event, one that was highly probable and preventable. Indeed, despite considerable evidence of the impending threats of pandemics, for the most part, governments failed to prepare for the pandemic, resulting in wide-scale social and economic losses.

The lessons from COVID-19, however, should remind us of the perils of ignoring gray rhino risks. Nowhere is this more apparent than with climate change, a highly probable, high impact threat that has largely been ignored to date. Despite …

Covid-19 And Business Interruption Insurance: The Constitutionality Of Legislatively Mandated Coverage, William G. Arnold

South Carolina Law Review

No abstract provided.

The Growth & Regulatory Challenges Of Decentralized Finance, Aaron J. Wright

Articles

The article explores the rapid growth and regulatory challenges of decentralized finance (DeFi), a blockchain-based sector that replaces traditional financial intermediaries with automated smart contracts. DeFi platforms, such as decentralized exchanges (DEXes) and lending protocols, offer financial services like trading, lending, and asset management without centralized control. While DeFi promises lower costs, greater accessibility, and financial inclusion, it also raises significant regulatory questions, particularly around compliance, liability, and oversight. The article highlights the tension between DeFi's decentralized nature and the need for legal frameworks to address risks such as fraud, market manipulation, and systemic instability.

Bursting The Auto Loan Bubble In The Wake Of Covid-19, Pamela Foohey

Articles

Before the COVID-19 pandemic, auto loans outstanding in the United States had soared to record highs. The boom in lending spanned new and used cars and traditional and subprime loans. With loan delinquencies also hitting new highs almost every quarter, predictions that the auto lending market could burst soon abounded. When the economy came to a grinding halt and unemployment skyrocketed in the wake of the pandemic, auto lenders knew they were facing a crisis. Throughout 2020, auto lenders granted more payment forbearances to consumers, while slashing interest rates on new loans. Auto manufacturers similarly made promises to buyers, such …