An Efficient Investment-Risk Model of Compliance

Corporate compliance — the internal processes that firms use to ensure that their employees do not violate applicable laws and regulations — has become big business. Regulation of business continues to grow, punctuated by landmark laws that have re-shaped the financial services (the Dodd-Frank Act) and health care (the Affordable Care Act) industries in the United States. Further, federal regulators have substantially ramped up their enforcement of numerous existing laws such as the Foreign Corrupt Practices Act and those governing insider trading. Corporations are dedicating greater resources towards internal compliance, both within legal departments and increasingly in separate and independent … Read more

Sovereign Equity – A Way Forward on Sovereign Debt?

Sovereign debt markets have been on a rough ride recently. On the heels of Argentina’s 2014 default, a turbulent debt situation in Greece has threatened the integrity of the Eurozone. An ongoing debt crisis in Ukraine has stoked economic anxiety and raised geopolitical blood pressures. Meanwhile, Puerto Rico’s debt crisis poses unique challenges as a quasi-sovereign territory without access to bankruptcy.

These episodes highlight the broad and far-reaching effects of sovereign debt on the global financial system. While sovereignty limits the enforceability of their debt contracts, sovereigns lack a formal bankruptcy system. Nor is there a global sovereign debt regulator. … Read more