Banking and Finance Law Commons^™

Proxy Advisors As Issue Spotters, Douglas Sarro

Brooklyn Journal of Corporate, Financial & Commercial Law

When institutional investors hire proxy advisors to prepare reports on matters up for vote at public company shareholder meetings, are they interested primarily in acquiring a bottom-line recommendation on how to vote, on which they can then blindly rely? Or in acquiring information that will help them make their own voting decisions? Supporters of controversial reforms introduced by the Securities and Exchange Commission (SEC) in 2019 and 2020 gravitate toward the former position, arguing that reform is needed to discourage undue reliance on proxy advisor recommendations. Opponents gravitate toward the latter position, arguing that additional regulation generally is unnecessary given …

Reducing Conflicts Of Interest: A "Glass-Steagall" Split Of Advisory And Consulting Services Of Proxy Advisory Firms, Austin Manna

Brooklyn Journal of Corporate, Financial & Commercial Law

This Note explores a solution to the potential problem with proxy advisory firms that involves an inherent conflict of interest arising from the structure of two services—advisory and consulting services—offered at certain proxy advisory firms in the United States. The solution proposed in this paper applies a Glass-Steagall framework to breakup these two services of the proxy advisory firms. In theory, this would eliminate the inherent conflicts of interest.

Tribal Lending After Gingras, Max King

Duke Law & Technology Review

Online payday lenders pose serious risks for consumers. Yet, for years, these lending companies have skirted state regulation by pleading tribal sovereign immunity. Under this doctrine, entities that are so affiliated with tribal nations that they are “an arm of the tribe” are immune from suit. Without comprehensive federal regulation, tribal sovereign immunity has served as a trump card at the pleading state for online payday lenders. The Note argues that change may be on the horizon. In the recent decision Gingras v. Think Finance, the Second Circuit held that the Supreme Court’s holding in Michigan v. Bay Mills Indian …

International Financial Products And Services, Cillian Bredin, Hernan Camarero, Alan B. Rabkin, Lorcan Tienan, Walter Stuber

The Year in Review

No abstract provided.

Why Supervise Banks? The Foundations Of The American Monetary Settlement, Lev Menand

Vanderbilt Law Review

Administrative agencies are generally designed to operate at arm’s length, making rules and adjudicating cases. But the banking agencies are different: they are designed to supervise. They work cooperatively with banks and their remedial powers are so extensive they rarely use them. Oversight proceeds through informal, confidential dialogue.

Today, supervision is under threat: banks oppose it, the banking agencies restrict it, and scholars misconstrue it. Recently, the critique has turned legal. Supervision’s skeptics draw on a uniform, flattened view of administrative law to argue that supervision is inconsistent with norms of due process and transparency. These arguments erode the intellectual …

Insider Trading As A Precursor To Modern Business Ethics, Robyn Coleman

Finance Undergraduate Honors Theses

There has been a recent change in business that there is more focus on the “stakeholder approach” than shareholder primacy. This can be attributed to the early actions and illegality of insider trading that expected a step beyond a solely economic approach. This attitude was then replicated to become what we see as the modern business approach. Business now includes ethical investing, environmental focus, corporate citizenship, and emphasis on multiple stakeholders that was not always there. Companies have embraced this position while others have been criticized for not doing so. As this approach develops and changes, it will be enlightening …

Appraising Problems, Not Stuff, Chad J. Pomeroy

St. Mary's Law Journal

Abstract forthcoming.

The E-Banknote As A ‘Banknote’: A Monetary Law Interpreted, Benjamin Geva, Seraina Neva Grünewald, Corinne Zellweger-Gutknecht

Articles & Book Chapters

This article discusses whether electronic banknotes can properly be characterised as ‘banknotes’, their design as such and what architectural models are available for their issuance by central banks. Issues are addressed under general principles governing the interpretation of monetary laws in the context of evolving technologies and institutional arrangements. The article proposes a clear terminology to address the concepts underlying digital currencies and access to central bank money, and argues that a banknote may be ‘written’ electronically. The stance adopted in the article is critical of both account-based retail central bank digital currency and cryptocurrencies, and highlights the salient features …

Decentralized Finance: Regulating Cryptocurrency Exchanges, Kristin N. Johnson

William & Mary Law Review

Global financial markets are in the midst of a transformative movement. The creation of Bitcoin and Facebook’s proposed distribution of Diem mark a watershed moment in the evolution of the financial markets ecosystem. Purportedly, peer-to-peer distributed digital ledger technology eliminates legacy financial market intermediaries such as investment banks, depository banks, exchanges, clearinghouses, and broker-dealers.

Yet careful examination reveals that cryptocurrency issuers and the firms that offer secondary market cryptocurrency trading services have not quite lived up to their promise. Notwithstanding cryptoenthusiasts’ calls for disintermediation, evidence reveals that platforms that facilitate cryptocurrency trading frequently employ the long-adopted intermediation practices of their …

The Failed Regulation Of U.S. Treasury Markets, Yesha Yadav

Vanderbilt Law School Faculty Publications

In trading the preeminent risk-free security, the $21 trillion U.S. Treasury market supports the country's borrowing needs, financial stability, and investor appetite for a safe asset. Straddling the nexus between a securities market and a systemically essential institution, the Treasury market must function at all costs, even if other markets fail.

This Article shows that Treasury market structure is fragile, weakened by a regulatory model poorly suited to match its design. First, public oversight of Treasuries is fragmented, divided between five or more agencies. The rulebook for Treasuries is sparse, lacking basic guardrails common to other markets. Without effective rules …

Empirical Findings In Need Of A Theory—In Defense Of Institutional Investors, Ittai Paldor

Loyola of Los Angeles Law Review

In recent years theorists have argued that institutional investors’ diversification harms competition. The theory is that when portfolio firms are cross-owned by institutional investors, managements compete less vigorously than they would have but for the cross ownership. The theory was bolstered by several empirical studies. The supporting empirical studies have been contested on methodological grounds, and some recent empirical studies make contradicting findings. But the theory of competitive harm itself is still considered persuasive. The federal antitrust agencies and competition agencies across the globe have begun to take action against instances of cross ownership based on this theory, in what …

Property As Rent, Faisal Chaudhry

St. John's Law Review

(Excerpt)

What is property? Over the course of the past two decades, legal scholars have reopened this question in a highly visible and often fractious way. On one side of the renewed debate are those who have sought to restore an object-centered model of property as an in rem right to exclude; on the other are those who have sought to reorient the old adage that property is a “bundle of sticks” toward a new emphasis on property’s role in forging social relations and democratic community. Sometimes known as a split between the “ownership” versus “progressive property” models, as fruitful …

The Rise Of "Fringetech": Regulatory Risks In Earned-Wage Access, Nakita Q. Cuttino

Northwestern University Law Review

By many accounts, the financial technology, or FinTech, sector appears to have developed an innovative solution to assist low-income workers with income shortfalls between standard paydays by displacing fringe financial service providers, namely payday lenders. Earned wage access programs facilitate early transfers of earned-but-unpaid wages to low- income workers through mobile platforms, algorithmic technology, and GPS tracking. To many, earned wage access programs represent a win-win for employees and employers. These programs are believed to be cheaper and safer alternatives to payday loans. Preliminary research also suggests these programs improve labor-retention rates for employers and help reduce financial distress for …

The Rescue Of Fannie Mae And Freddie Mac–Module F: Federal Reserve’S Large-Scale Asset Purchase (Lsap) Program, Daniel Thompson, Adam Kulam

Journal of Financial Crises

By late 2008, the secondary mortgage markets were suffering high default rates, causing mortgage lending to slow and the value of mortgage securities to plummet. The Federal Reserve lowered the federal funds rate, and the government placed Fannie Mae and Freddie Mac into conservatorship, yet credit in housing and other financial markets remained tight. On November 25, the Fed announced its intent to purchase up to $500 billion in agency mortgage-backed securities (MBS) and $100 billion in agency debt to reduce the cost and increase the availability of mortgage credit, which would support housing markets and improve conditions in financial …

The Rescue Of Fannie Mae And Freddie Mac-Module B: Senior Preferred Stock Purchase Agreements, Daniel Thompson

Journal of Financial Crises

On September 6, 2008, as part of a four-part government intervention, the Federal Housing Finance Agency (FHFA) took into conservatorship the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), two government-sponsored enterprises (GSEs) that dominated the US secondary mortgage market. Concurrently, the FHFA, as conservator, entered into Senior Preferred Stock Purchase Agreements (SPSPAs) with Treasury, under which Treasury committed to provide funding to ensure the GSEs’ positive net worth. In return, Treasury received senior preferred stock and a warrant to purchase 79.9% of the GSEs’ common stock. The SPSPAs have been amended three …

The Rescue Of Fannie Mae And Freddie Mac – Module A: The Conservatorships, Daniel Thompson, Rosalind Z. Wiggins

Journal of Financial Crises

Two government-sponsored enterprises (GSEs), the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), dominated the secondary mortgage market during the US housing crisis, collectively holding or guaranteeing $5.3 trillion in mortgage assets by late 2007. As the crisis escalated, the two GSEs began to report substantial losses and their survival became uncertain. On September 6, 2008, the GSEs’ new regulator, the Federal Housing Finance Agency (FHFA), placed the firms into indefinite conservatorships, one step of a four-part government intervention to stabilize the enterprises. This case study evaluates the purpose and efficacy of the …

The Rescue Of American International Group Module F: The Aig Credit Facility Trust, Alec Buchholtz, Aidan Lawson

Journal of Financial Crises

In September 2008, American International Group, Inc. (AIG) experienced a liquidity crisis. To avoid the insurance giant’s bankruptcy, the Federal Reserve Bank of New York (FRBNY) extended an $85 billion emergency secured credit facility to AIG. In connection with the credit facility, AIG issued 100,000 shares of preferred stock, with voting rights equal to and convertible into 79.9% of the outstanding shares of AIG common stock, to an independent trust (the Trust) set up by the FRBNY. Three trustees held the stock for the sole benefit of the US Treasury, exercised the rights, powers, authorities, discretions, and duties of the …

The Rescue Of American International Group Module A: The Revolving Credit Facility, Alec Buchholtz, Aidan Lawson

Journal of Financial Crises

On September 15, 2008, the big three rating agencies downgraded AIG’s credit ratings multiple levels, exacerbating liquidity strains that the company was experiencing due to increasing cash demands by securities borrowers and collateral calls by credit default swap (CDS) customers. To prevent AIG from filing for bankruptcy, the Federal Reserve (the Fed) announced on the following day that, pursuant to its emergency powers, it would provide the company with an $85 billion Revolving Credit Facility (RCF). The RCF was secured by AIG assets and interests in its subsidiaries and required AIG to grant the US Department of the Treasury a …

Evaluation Of Sport Facilities In Sport Cities In Jordan, Sari Hamdan

Al-Balqa Journal for Research and Studies البلقاء للبحوث والدراسات

The aim of this study was to evaluate facilities in sport cities in Jordan. The sample of this study consisted of (24) employees in sport cities the researcher bilt a tool and validity and reliability was done for the research tool. The results showed that sport cities were in a good condition, however, El-Hussien city was significantly better than the other sport cities. The researcher recommended to using the research tool of this study as instrumentation to evaluate sports facilities in sport cities.

Italian Ambitions In Syria And Lebanon (1870-1945), Ahmad Alshrideh

Al-Balqa Journal for Research and Studies البلقاء للبحوث والدراسات

The aim of this study is to clarify the Italian Ambitions in Syria and Lebanon (1870-1945), and shows the Italian orientation in this region, and to know the Italian methods to achieve its ambitions. The study talks about the Italian movement towards Lebanon, and the Italians Intervention in Lebanese civil war 1860. Finally, the study recalls the Italian claims her mandate to Syria and Lebanon as an alternative to the French mandate. The study concluded that, despite Italys efforts to achieve its ambitions in Syria and Lebanon, it deeply collides with the legacy institutions that established by England and France …