Law and Economics Commons^™

Ad Hoc Emergency Liquidity Programs In The 21st Century, Steven Kelly, Vincient Arnold, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

This paper surveys 22 case studies of 21st century instances when financial crisis-fighters implemented ad hoc emergency liquidity (AHEL) interventions, interventions designed to provide liquidity to a troubled institution that the authorities believe is systemically important. While emergency liquidity support is often introduced with the real or communicated intention of preventing illiquidity from leading to insolvency, the liquidity crisis should instead be viewed as the manifestation of the market’s assessing the firm as nonviable as a going concern. For that reason, authorities should provide AHEL assistance only to institutions that they have deemed viable or that they have committed to …

Brazil: Banco Btg Pactual Emergency Liquidity Program, 2015, Vincient Arnold

Journal of Financial Crises

On November 25, 2015, André Esteves, then CEO of Banco BTG Pactual, a large Brazilian investment bank, was arrested by Brazilian authorities in connection with suspected involvement in a corruption scandal. Although the arrest did not involve BTG in any capacity and Esteves was later acquitted, the company’s stock quickly collapsed and depositors and other creditors rushed to reduce their exposures to the company. Depositors withdrew certificates of bank deposits, which BTG relied on to fund its daily operations. By November 27, BTG shares had fallen 26%. On December 2, the top seven shareholders of BTG took control of the …

Containing Runs On Solvent Banks: Prioritizing Recovery Over Resolution, Edoardo David Martino, Enrico C. Perotti

Journal of Financial Crises

The sudden banking defaults in the spring of 2023 proved current prudential norms insufficient to prevent bank distress. Capital and liquidity norms need to be adjusted. The experience also shows how a lack of credible supervisory tools led to forbearance and finally chaotic public bailouts. An intervention gap arises when viable but undercapitalized banks are at the mercy of runs. Once outflows start to escalate, all that is left is to prepare for resolution and assign losses. We call for new Pillar II – i.e. activated by the supervisor – stabilizing measures, as contingent capital and liquidity tools.

A timely …

Against Monetary Primacy, Yair Listokin, Rory Van Loo

Northwestern University Law Review

To reduce inflation, the Federal Reserve (Fed) raises interest rates. But every month with high interest rates increases the risk of a devastating recession. Recessions impose not only short-term pain in the form of widespread unemployment but also lifelong harm for many, as vulnerable workers and those who start their careers during a downturn never fully recover. Yet hiking interest rates is the centerpiece of U.S. inflation-fighting policy. When inflation is high, the Fed raises interest rates until inflation is tamed, regardless of the consequent sacrifices. We call this inflation-fighting paradigm “monetary primacy.” Despite its great risks, monetary primacy has …

The Relevance Of Catholic Social Thought For Law, Russell Powell

Seattle Journal for Social Justice

No abstract provided.

The Unconstitutional Impact Of Anti-Transgender Legislation On Native Hawaiians, Aaliah Moi-Matsumoto

Seattle Journal for Social Justice

No abstract provided.

What About The Buyers? Deriving Factors Of Demand In The U.S. Black Market, Eric S. Schneider

Undergraduate Theses

The vast majority of econometric research regarding black markets focuses on the supply. Relatively little information is definitively shown in academic literature regarding the drivers of demand for black markets. This project seeks to identify factors of demand for black market goods and services. First, this paper gives a brief definition of the broad definition of black markets, before specifically defining the scope of individual markets which will be included in this project. Next, there is a brief review of recent literature on the U.S. black market in order to determine prime candidates for factors of demand. Then, a robust …

Retaliatory Taxation, Reuven S. Avi-Yonah

Law & Economics Working Papers

This paper discusses the Trump administration's potential use of section 891 and pending legislation to apply retaliatory taxes to foreign countries that impose "discriminatory or extraterritorial" taxation on US multinationals.

Build Public Renewables, Again, Sandeep Vaheesan

Michigan Law Review

A review of The Price Is Wrong: Why Capitalism Won’t Save the Planet. By Brett Christophers.

Prophetic Prosperity: Unveiling The Next Frontier Of Socially Responsible & Sustainable Investing, Alyssa Carbone

Buffalo Law Review

Islamic finance, poised for a significant rise in prominence, stands uniquely at the intersection of religious adherence and modern financial systems. With Islam projected to overtake Christianity as the dominant world religion by 20501 and Muslims constituting the fastestgrowing religious group, expected to reach a global population of nearly 3 billion adherents in 20602, the demand for financial products aligned with the values of Islam is set to soar. Accordingly, Islamic finance, specifically Islamic capital markets, has strong projections of growth, even amidst economic instability in traditional Western financial markets.3 Yet, despite its promising outlook, Islamic finance remains largely unfamiliar …

Five Prairie Reflections On Reviving Rural America, Hannah Haksgaard, Sean Kammer, Travis L. Letellier

West Virginia Law Review

This Essay offers five reflections on Ann E. Eisenberg’s book Reviving Rural America: Toward Policies for Resilience. Each reflection approaches the book from the positionality of writing from rural America, specifically the prairies of South Dakota. Collectively, the reflections cover the politics of voting in a red rural state, policies of local municipal government, the central economic principles in the book, the presence of energy production in rural America, and environmentalism’s relevancy and impact.

James Baldwin And What U.S. Governments Owe Every American, Randall K. Johnson

Faculty Works

This book review looks at the life, work and impact of James Baldwin, a famous writer and civil rights activist that was born one hundred (100) years ago. It does so, for one of the first times in the field of law, by examining Baldwin’s influence on the legal system. The book review carries out its work by identifying Baldwin’s impacts upon U.S. law: before, during and after his public service career. In the process, this book review describes how governments can build on Baldwin's writings and advocacy work.

The Cost Of Capital: Lowering The Cost Of Capital For Climate And Sdg Finance In Emerging Markets And Developing Economies (Emdes), Jeffrey D. Sachs, Lisa E. Sachs, Ana M. Camelo Vega, Bradford M. Willis

Columbia Center on Sustainable Investment

Today, some of the world's fastest-growing economies face some of the highest borrowing costs – even for clean energy and development projects with strong fundamentals. This is not a function of global capital scarcity. Trillions are available. The problem lies in systemic barriers that prevent capital from flowing to where it’s most urgently needed. The high cost of capital in EMDEs not only undermines critical financing for the energy transition and sustainable development; it also limits the ability for US- and EU-based financial institutions to invest in and finance projects in EMDEs, despite institutional and stakeholder appetite and interest for …

Preface: The Field Of International Economic Law, Gregory Shaffer, Michael Waibel

Georgetown Law Faculty Publications and Other Works

This is the preface to our forthcoming book Advanced Introduction to International Economic Law for Edward Elgar Publishing. The book is unique in multiple ways. It is the first book that addresses the breadth of international economic law thematically, instead of serially by sub-field of law. We examine the history of key sub-fields, their contested functions, and the ways that they disparately address issues of liberalization and market access, discrimination, state regulatory policy space, fairness, governance and dispute resolution. Unlike law and economic accounts, we do not naturalize the “functions” of international economic law. Rather, we note how different actors …

Legal Market Decartelization, Milan Markovic, Nuno Garoupa

Faculty Scholarship

American lawyers’ grip on the legal market is receding. Scholars and policymakers increasingly agree that the public has little to lose and potentially much to gain from legal market decartelization - the weakening of the lawyers’ monopoly over the legal services market. Harkening to deregulatory initiatives abroad and in Arizona and Utah, reformers contend that removing restrictions on the corporate delivery of legal services and unauthorized practice of law will slash costs and expand access to justice.

Drawing on economic theory and recent market developments, this Article offers a cautionary rejoinder. Understandable concerns about cartelization and lawyer rent-seeking have led …

Debt Tokens, Andrea Tosato, Diane Lourdes Dick, Christopher K. Odinet

Faculty Scholarship

The worlds of crypto and bankruptcy have collided. Once-prominent, fast-growing, and even politically influential platforms for trading cryptocurrencies have imploded spectacularly. Gone are the glossy advertisements, celebrity endorsements, and proclamations that blockchain operates as a law unto itself. Instead, insolvent crypto businesses—including the crypto exchange giant FTX—find themselves in bankruptcy court, no different from any other failed enterprise. These bankruptcies reveal a startling reality: individual investors who placed their trust in these platforms have been stripped of their digital assets. In their stead, they hold hard-to-collect claims against these defunct platforms.

Amid the chill of the crypto winter, bankruptcy has …

Micro-Costs, Kiel Brennan-Marquez, Brendan S. Maher

Faculty Scholarship

The modern world is filled with tiny attentional impositions (cognitiveasks) that inflict small mental burdens (micro-costs) on virtually everyone, everywhere, all the time. Micro-costs make life worse, and everybody knows it. They sap collective energy; they lead to worse decisions; they exacerbate inequality; and they contribute to an overall sense of "mismanagement" in the world, a sentiment that readily pairs with destructive political impulses.

Yet the law has essentially ignored micro-costs-until now. In what follows, we construct a theory of micro-costs that gives the phenomenon analytic shape and charts a path forward for reform. Drawing on the insights of philosophy, …

Sex & Startups, Jens Frankenreiter, Talia B. Gillis, Eric L. Talley

Faculty Scholarship

Private law offers a unique solution to the problem of long-term fiscal commitment. When Congress enacts a spending program that will take many years to reach fruition, there is a risk of a subsequent Congress or President cutting off funding in the interim. There is no escape from the problem within appropriations law itself. One solution, however, is to entrust private sector allies as vessels of long-term commitment. As a matter of political economy, that solution draws on policy-feedback theory. As a matter of law, the solution rests on a mechanism that Congress already uses but has not recognized its …

On The Meaning Of Discrimination: Anti-Racism Versus Color-Blind Policy, Keith N. Hylton

Faculty Scholarship

Chief Justice Roberts of the United States Supreme Court has said that “the way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”1 In this Article, I examine what it means to discriminate on the basis of race—or what it means to stop discriminating on the basis of race. I consider interventions designed to enhance social welfare in an economy with racially discriminatory games operating at its base. One set of interventions is color-blind, in the sense that it treats all actors alike regardless of race. The other set of interventions is …

Against Monetary Primacy, Yair Listokin, Rory Van Loo

Faculty Scholarship

To reduce inflation, the Federal Reserve (Fed) raises interest rates. But every month with high interest rates increases the risk of a devastating recession. Recessions impose not only short-term pain in the form of widespread unemployment but also lifelong harm for many, as vulnerable workers and those who start their careers during a downturn never fully recover. Yet hiking interest rates is the centerpiece of U.S. inflation-fighting policy. When inflation is high, the Fed raises interest rates until inflation is tamed, regardless of the consequent sacrifices. We call this inflation-fighting paradigm “monetary primacy.” Despite its great risks, monetary primacy has …