Banking and Finance Law Commons^™

Restructuring And Forgiveness In Financial Crises B: The Asian Crisis Of 1997, June Rhee, Andrew Metrick

Journal of Financial Crises

Asia’s economy, Thailand in particular, was booming when the financial crises hit in the 1990s. However, troubles were brewing underneath the seemingly buoyant economy. With a fragile financial system and ineffective domestic government responses to these troubles, an exchange rate crisis took over Thailand, and this crisis started a financial contagion in the neighboring countries. This case reviews the background and domestic government responses to contain the crisis, and the international intervention provided by the International Monetary Fund including the assistance and the required reforms accompanying the support.

Guarantees And Capital Infusions In Response To Financial Crises B: U.S. Guarantees During The Global Financial Crisis, June Rhee, Andrew Metrick

Journal of Financial Crises

During 2008-09, the federal government extended multiple guarantee programs in an effort to restore the financial market and contain the panic and crisis in the market. For example, the Treasury provided a temporary guarantee program for the money market funds, the FDIC decided to stand behind certain debts and non-interest-bearing transaction accounts, and the Treasury, the FDIC, and the Federal Reserve agreed to share losses in certain assets belonging to Citigroup. This case reviews these guarantee programs implemented during the global financial crisis by the government and explores the different rationale that shaped certain design features of each program.

Guarantees And Capital Infusions In Response To Financial Crises A: Haircuts And Resolutions, June Rhee, Andrew Metrick

Journal of Financial Crises

After the mortgage market meltdown in mid-2007 and during the financial crisis in 2008, major financial institutions around the world were on the verge of collapsing one after another. Faced with these troubles, the government had to respond quickly to contain the crisis as efficiently as possible. It was, however, limited in resources, time, and experience. To make matters worse, the complexity and opaqueness of the financial market and these institutions greatly affected the government’s ability to design an efficient and consistent method to contain the crisis. Shortly after Lehman Brothers filed for bankruptcy on September 15, 2008, American International …

The Legal Authorities Framing The Government’S Response To The Global Financial Crisis, Scott G. Alvarez Esq., Thomas C. Baxter Jr., Esq., Robert F. Hoyt Esq.

Journal of Financial Crises

The 2007–09 global financial crisis required that the Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation survey their various legal authorities and consider how they might be used to mitigate the meltdown of the United States financial system. This essay explores the range of legal authorities and procedural issues presented by key facilities implemented during the crisis, many of which were new and creative. This essay also provides valuable examples of how such authorities were used and describes how, in some instances, agencies worked together to design innovative interventions that no separate agency could have achieved alone.

Grinding Gears: Meshing Maine Mortgage Foreclosure Law And The Bankruptcy Code, Daniel L. Cummings

Maine Law Review

In Maine interesting and unresolved questions often arise when a mortgagor files for bankruptcy after a judgment of foreclosure has been entered in state court but before a foreclosure sale has occurred. Specifically, what rights does the mortgagor have in the real property? And are the mortgagee's subsequent steps to complete the sale barred by the automatic stay of the Bankruptcy Code (“Code”)? These questions are made more difficult because Maine is a title theory state and because the foreclosure sale occurs after the expiration of the statutory redemption period rather than, as in most states, before it. Because a …

The Auditor's Responsibilities For Fraud Detection And Disclosure: Do The Auditing Standards Provide A Safe Harbor?, James L. Costello

Maine Law Review

Eighty-seven percent of managers recently surveyed were willing to commit financial statement fraud. More than half were willing to overstate assets, forty-eight percent were willing to understate loss reserves and thirty-eight percent would "pad" a government contract. These disturbing results are underscored by the financial miseries still brewing in the savings and loan industry, as well as by other corporate and banking financial debacles of the past decade, including Lincoln Savings & Loan, Wedtech, and the Delorean sports car venture scandal. Amidst these financial ruins we find the chronic element of management fraud. Unfortunately for investors and depositors a troublesome …

Grinding Gears: Meshing Maine Mortgage Foreclosure Law And The Bankruptcy Code, Daniel L. Cummings

Maine Law Review

In Maine interesting and unresolved questions often arise when a mortgagor files for bankruptcy after a judgment of foreclosure has been entered in state court but before a foreclosure sale has occurred. Specifically, what rights does the mortgagor have in the real property? And are the mortgagee's subsequent steps to complete the sale barred by the automatic stay of the Bankruptcy Code (“Code”)? These questions are made more difficult because Maine is a title theory state and because the foreclosure sale occurs after the expiration of the statutory redemption period rather than, as in most states, before it. Because a …

A Case For Reforming The Anti-Money Laundering Regulatory Regime: How Financial Institutions’ Criminal Reporting Duties Have Created An Unfunded Private Police Force, Christopher Wilkes

Indiana Law Journal

Part I of this Note provides background information outlining the relevant BSA/AML laws that establish financial institutions’ affirmative duties to report financial crimes. Part II analyzes the contours of other laws that create mandatory criminal reporting obligations, including their extent, their underlying justifications, and how stringently government agencies enforce them. Part III demonstrates how financial institutions’ reporting duties are uniquely stringent and punitive compared to those imposed elsewhere in the law, and it questions the justifications of this policy. Lastly, Part IV of this Note argues that the BSA/AML regulatory regime could be reformed to reduce the costs and duties …

Global Challenges And Regulatory Strategies To Fintech, Aurelio Gurrea-Martinez, Nydia Remolina

Centre for AI & Data Governance (2019-2025)

The rise of new technologies has changed the operation, regulation and supervision of financial markets, bringing new challenges and opportunities for consumers, regulators, and financial institutions. This Article seeks to explore the most common regulatory strategies used by financial regulators around the world to address the challenges associated with the rise of fintech. These strategies include the imposition of bans, regulatory passivity, adoption of new legislation, permission on a case by case basis, and more interactive approaches such as innovation offices, accelerators and sandboxes. This Article argues that the adoption and desirability of each regulatory approach will depend on a …

The Siren Song Of Litigation Funding, J.B. Heaton

Michigan Business & Entrepreneurial Law Review

For an investor, litigation funding is too tempting to resist. Litigation funding promises that most elusive of investment returns: those uncorrelated with an investor’s other investment returns. Litigation funding also invests in a world that seems fraught with possible pricing inefficiencies. It seems plausible—even likely—that a team of smart lawyer-underwriters can identify high-value litigation investments to generate superior returns for litigation funding investors. But more than a decade of experience suggests the promise of litigation funding is a siren song. The promise draws investors into the water, but the payoffs may be meager and rare. While litigation funding has always …

Racialized Tax Inequity: Wealth, Racism, And The U.S. System Of Taxation, Palma Joy Strand, Nicholas A. Mirkay

Northwestern Journal of Law & Social Policy

This Article describes the connection between wealth inequality and the increasing structural racism in the U.S. tax system since the 1980s. A long-term sociological view (the why) reveals the historical racialization of wealth and a shift in the tax system overall beginning around 1980 to protect and exacerbate wealth inequality, which has been fueled by racial animus and anxiety. A critical tax view (the how) highlights a shift over the same time period at both federal and state levels from taxes on wealth, to taxes on income, and then to taxes on consumption—from greater to less progressivity. Both of these …

Debt Bondage: How Private Collection Agencies Keep The Formerly Incarcerated Tethered To The Criminal Justice System, Bryan L. Adamson

Northwestern Journal of Law & Social Policy

This Article examines the constitutionality of statutes which allow courts to transfer outstanding legal financial obligations to private debt collection agencies. In Washington State, the clerk of courts can transfer the legal financial obligation of a formerly incarcerated person if he or she is only thirty days late making a payment. Upon transfer, the debt collection agencies can assess a “collection fee” of up to 50% of the first $100.000 of the unpaid legal financial obligation, and up to 35% of the unpaid debt over $100,000. This fee becomes part of the LFO debt imposed at sentencing, and like that …

Uk & Ksa Vats: A Cutting-Edge Proposal – Mini-Blockchain And Vatcoin, Richard Thompson Ainsworth, Musaad Alwohaibi, Mike Cheetham

Faculty Scholarship

This paper develops, extends, and clarifies themes introduced in five prior papers dealing with blockchain, and VATCoin in the context of both (a) the new VATs in the Gulf Cooperation Council (GCC), and (b) the mature VATs in the EU. Five additional papers on VAT technology advances in Fiji, with blockchain and VATCoin applications to New Zealand’s approach to online sales platforms (the Netlix Tax) are similarly referenced and extended. The GCC VAT papers were exploratory. For the most part, they were composed before any GCC jurisdiction had implemented a VAT, and in three instances even before the GCC Framework …

Victim V. Victim Restitution: The Commingling Fictions, Andrew Kull

St. Mary's Law Journal

Abstract forthcoming.

Cares Act Gimmicks: How Not To Give People Money During A Pandemic And What To Do Instead, Pamela Foohey, Dalié Jiménez, Christopher K. Odinet

Faculty Scholarship

The coronavirus pandemic upturned Americans’ lives. The profound financial effects caused by even a few weeks of the coronavirus’ upheaval spurred Congress to pass the CARES Act, which purported to provide economic relief to individuals and businesses. For individuals, the CARES Act includes five provisions that were effectively designed to provide people money. Chief among those provisions are a direct payment in the form of a tax rebate and enhanced employment benefits.

Ultimately, this financial support will prove to be shockingly minimal. The direct payments represent a fraction of the average American households’ monthly budget. The unemployment benefits, while providing …

Little Power Struggles Everywhere: Attacks On The Administrative State At The Securities And Exchange Commission, Roberta S. Karmel

Faculty Scholarship

No abstract provided.

Modernizing The Bank Charter, David Zaring

William & Mary Law Review

The banking charter—the license a bank needs to obtain before it can open—has become the centerpiece of an argument about what finance should do for the rest of the economy, both in academia and at the banking agencies. Some advocates have proposed using the charter to pursue industrial policy or to end shadow banking. Some regulators have proposed giving financial technology firms bank charters, potentially breaking down the traditionally high walls between banking and commerce. An empirical survey of chartering decisions by the Office of the Comptroller of the Currency suggests that chartering is best understood as an ultracautious licensing …

Who Owns African Art? Envisioning A Legal Framework For The Restitution Of African Cultural Heritage, Charity Gates

Cardozo International & Comparative Law Review

The note advocates for the establishment of a legal framework to address the restitution of African cultural heritage, emphasizing the need to return looted art and artifacts from Western museums to their countries of origin. It highlights the historical injustices of colonial looting and the current legal barriers that hinder restitution, proposing solutions that balance cultural preservation with international cooperation.

Libra: A Concentrate Of "Blockchain Antitrust", Thibault Schrepel

Michigan Law Review Online

Blockchains promise to decentralize the economy, bypassing trusts in favor of decentralized communities. The World Economic Forum predicts that 10 percent of the global gross domestic product will be stored on block-chain by 2027. Gartner further prophesizes that blockchain will create $3.1 trillion worth of business value by 2030. Even if that prediction turns out to be too optimistic, blockchain’s legal implications cannot be neglected.

Delaware's New Competition, William J. Moon

Northwestern University Law Review

According to the standard account in American corporate law, states compete to supply corporate law to American corporations, with Delaware dominating the market. This “competition” metaphor in turn informs some of the most important policy debates in American corporate law.

This Article complicates the standard account, introducing foreign nations as emerging lawmakers that compete with American states in the increasingly globalized market for corporate law. In recent decades, entrepreneurial foreign nations in offshore islands have used permissive corporate governance rules and specialized business courts to attract publicly traded American corporations. Aided in part by a select group of private sector …