What determines the effectiveness of corporate boards? Corporate legal scholars usually approach this question by focusing on directors’ incentives, such as counting how many directors are independent or whether the roles of the CEO and Chair are separated. Yet on the ground, the focus has been shifting to directors’ skill sets and experience. Investors, regulators, […]
“Limited liability” is the rule that shareholders are not liable for the debts of the corporations they own. Critics of limited liability argue that it encourages corporations to ignore the harms they cause and cuts off recovery for deserving plaintiffs. Defenders of limited liability reply that it helps the economy by reassuring investors that they […]
In times of crisis such as the 2008 financial crisis and the 2020 COVID-19 pandemic central banks throughout the world engage in interventions with lasting effects on financial markets and the macroeconomy, for better and worse. The negative political consequences of these interventions—fears of politicizing central banking and inflationary concerns about dramatic interventions among them—can dampen […]
In a series of recent opinions, the Supreme Court has threatened to transform the nondelegation doctrine into a device for imposing sweeping limits on congressional authority to empower the regulatory state. But, as a matter of history and logic, the nondelegation doctrine has a quite different purpose. This Article argues that the nondelegation doctrine plays […]
The challenge of financial inclusion is among the most intractable policy problems in banking. Despite living in the world’s wealthiest economy, many Americans are shut out of the financial system. Five percent of American households lack a bank account, and an additional thirteen percent rely on expensive and sometimes predatory fringe financial services, such as check cashers […]
The United States has delegated the responsibility of keeping the lights on to a self-regulatory organization called the North American Electric Reliability Corporation (NERC). Although NERC is a crucial example of industry-led governance—and regulates in an area that is central to our economy and basic human survival—this unusual institution has received scant attention from policymakers and scholars. Such attention […]
So-called passive index funds—investment funds that are designed to track a pre-specified underlying index—have become a dominant force in the investing landscape, collectively controlling over $12 trillion in assets. It is widely assumed that these funds are obligated to follow their underlying index, and that fund managers cannot, or do not, select portfolios that deviate […]
Conventional wisdom is that the standardized boilerplate terms used in large commercial markets survive unchanged because they are an optimal solution to the contracting problems facing parties in these markets. As Smith and Warner explained, “harmful heuristics, like harmful mutations, will die out.” But an examination of a sample of current sovereign bond contracts reveals […]
This Article is part of a special issue comprised of a series of Articles prepared by a collection of economists and policy experts in the United States, the United Kingdom, and the European Union who have studied––and are committed to the improvement of––competition in digital markets. For other Articles in this issue, please click here.
This Article is part of a special issue comprised of a series of Articles prepared by a collection of economists and policy experts in the United States, the United Kingdom, and the European Union who have studied––and are committed to the improvement of––competition in digital markets. For other Articles in this issue, please click here.
This Article is part of a special issue comprised of a series of Articles prepared by a collection of economists and policy experts in the United States, the United Kingdom, and the European Union who have studied––and are committed to the improvement of––competition in digital markets. For other Articles in this issue, please click here.
This Article is part of a special issue comprised of a series of Articles prepared by a collection of economists and policy experts in the United States, the United Kingdom, and the European Union who have studied––and are committed to the improvement of––competition in digital markets. For other Articles in this issue, please click here.
This Article is part of a special issue comprised of a series of Articles prepared by a collection of economists and policy experts in the United States, the United Kingdom, and the European Union who have studied––and are committed to the improvement of––competition in digital markets. For other Articles in this issue, please click here.
To open bank accounts, new customers provide personal information and make a deposit. Within a few minutes (or perhaps a few days), new customers get access to payment services. For many years, the process financial institutions used to open accounts at Federal Reserve Banks was similar. Eligible banks filled out a one-page form and within […]
This Article identifies problems and opportunities at the intersection of mergers and acquisitions (M&A) and corporate crime and compliance. In M&A, criminal successor liability is of particular importance, because it is quantitatively less predictable and qualitatively more threatening to buyers than successor liability in tort or contract. Private successor liability requires a buyer to bear […]