On 18 February 2015, the European Commission published a green paper on building a Capital Markets Union, alongside two complementary consultation papers on a revised EU framework for securitisation and a review of the Prospectus Directive. The proposals are part of an initiative to develop a more integrated single market for raising capital across the EU. The proposals in the green paper are in outline form because the ideas for creating the Capital Markets Union remain at an early stage of development. However, with an action plan due to be published later in 2015, they provide insight into the early … Read more
On April 1st, President Obama issued an Executive Order authorizing sanctions against persons found to have engaged in or supported significant malicious cyber activities. Under the order, the Secretary of the Treasury is authorized to designate and impose sanctions on individuals and entities that are responsible for or complicit in certain cyber-related activities that pose a significant threat to the national security, foreign policy, economic health, or financial stability of the United States. The Executive Order focuses in particular on cyber activities that harm or compromise critical infrastructure, disrupt computers or computer networks, or misappropriate funds, information, or trade secrets. … Read more
Thank you, Hal [Scott], for that kind introduction. I apologize for not being able to address you in person. Back in 2013, I opened a speech to the American Academy in Berlin with a bit of German. While I managed not to call myself a jelly donut, my German was nonetheless so bad that I have been banned from entering the country to speak in a public forum.
I applaud Professor Scott and the Harvard Law School for sponsoring this important and timely symposium. After the financial crisis, regulators around the world rushed to take action — any action, … Read more
Questions of corporate governance and responsibility have been heightened by a number of corporate scandals and other events leading up to the financial crisis of 2008. In the meantime, philosophers and lawyers have been questioning the very meaning of corporate agency and responsibility, while progress by economists in the theory of the firm is widely perceived to have slowed. The aim of the first WINIR Symposium “The nature and governance of the corporation”, which will be hosted in Lugano at Università della Svizzera italiana (USI, Lugano) from 22th to 24th April 2015, is to contribute to our understanding of the … Read more
Europe is now engaged in an experiment unprecedented in world history: can independent nations – even if linked by significant legal, economic, and social ties – merge their financial systems into a true banking union? Policymakers are working diligently to achieve that goal. Spurred by the financial turmoil of 2007-2009 and its aftermath, Europe has created a network of powerful regulatory institutions including the Single Supervisory Mechanism, the European Systemic Risk Board, the European Banking Authority, the Single Resolution Mechanism, and the European Stability Mechanism. Acting individually and in concert, these bodies are working to enhance the integration of financial … Read more
Following closely on the heels of the reinstated reporting requirements for inbound and outbound direct investment involving U.S. entities, the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) has announced plans to require U.S. financial service providers to respond to the Form BE-180 Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons. As proposed, responses to Form BE-180 will be required by October 1, 2015, from all U.S. financial service providers that, during their 2014 fiscal year, had financial transactions totaling $3 million or more on a consolidated basis directly with non-U.S. persons (including … Read more
It is an honor to speak at the Federal Reserve Bank of Atlanta’s 20th Financial Markets Conference, and I am grateful to President Lockhart and the organizers for inviting me to do so. This evening I would like to take stock of progress on financial reforms in the nonbank financial sector and highlight some principles for approaching prudential regulation of this sector to further strengthen financial stability.
The nonbank sector includes firms with diverse business models and practices, many of which differ greatly from those of banks. Even so, nonbank firms and activities can pose the same key vulnerabilities … Read more
On February 11, 2015, the Securities and Exchange Commission issued a final rule (the “Final Rule”) and proposed amendments (the “Proposed Rule”) on the reporting and public dissemination of security-based swap (“SBS”) information, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Notably, the SEC:
- delayed establishing a final compliance schedule for SBS reporting;
- left many details of SBS reporting, including many of the required data elements, the format of reports and the assignment of product identifiers for standardized SBS, to registered security-based swap data repositories (“SBSDRs”);
- created an interim phase for the reporting of SBS information,
The Committee on Foreign Investment in the United States (“CFIUS”), a multi-agency U.S. regulatory body empowered to review transactions involving a foreign person and a U.S. business that may affect U.S. national security, recently delivered its unclassified Annual Report to Congress for the calendar year 2013 (“Annual Report”). In accordance with the legal prohibition against public disclosure of such information, the Annual Report contains no information with respect to specific transactions. Nonetheless, it remains a remarkable window into the reach and operation of CFIUS, and its impact on transactions involving U.S. businesses.
As in previous years, and as required … Read more
The Council of the EU has reached political agreement on the EU Benchmark Regulation (the Regulation). The legislation will impose controls on a range of financial market activity that uses interest rate, currency, commodity and other indices to set prices and contract values. Although not yet finalised the new rules are expected to be published later this year and apply in 2016. The Regulation is expansive in scope, covering not only indices such as LIBOR and the DAX but also many other less obvious ‘benchmarks’. The new rules could lead to the transformation or even disappearance of some benchmarks, presenting … Read more
Earlier this week, China’s antitrust regulators started off 2015 with a continuation of last year’s aggressive enforcement of the Anti-Monopoly Law (“AML”) by levying an almost $1 billion fine against Qualcomm, about 8 percent of the company’s 2013 China revenue — equaling the highest percentage penalty previously dispensed under the AML, but short of the 10 percent maximum allowable. The penalty ends the NDRC’s first “abuse of dominance” investigation.1 The fine is greater than the total amount of 2014 NDRC AML fines and is five times the combined $202 million fines against the 12 Japanese auto parts and bearings … Read more
Thank you for the opportunity to speak to you today, it is great to be back in New York. The Citizens Budget Commission has played an important role over the years as a forum to discuss issues of interest to New Yorkers that are often also of national and even global importance. Given New York’s preeminence as a center of global finance, I thought it would be appropriate to discuss just such a topic, which is how the Federal Reserve oversees the largest financial institutions, many of which are headquartered or have a major presence here, and how that oversight … Read more
The following post is taken from an address by CFTC Commissioner J. Christopher Giancarlo before the ABA Business Law Section, Derivatives & Futures Law Committee Winter Meeting and is dated January 23, 2015. Commissioner Giancarlo’s address may be accessed here.
Thank you for the kind introduction.
Let me begin with the disclaimer that my remarks today reflect my own views and do not necessarily reflect the views of the Commodity Futures Trading Commission (CFTC or Commission), my fellow Commissioners or the CFTC staff.
It is an honor to speak to you today. I see so many truly distinguished members … Read more
I want to thank the Brookings Institution for inviting me to comment today on Martin Wheatley’s presentation on the Fair and Effective Markets Review (Review). The Review is an ambitious and important initiative. Although London is perhaps the leading center for many fixed-income, currency, and commodities (FICC) markets, these markets are global, and the United States and the largest U.S. firms play key roles in them. So the Review addresses issues that affect our markets as well.
The Review looks to identify further steps that should be taken to restore public confidence in FICC markets in the wake of the … Read more
The U.S. Department of Justice estimates that breaking up illegal cartels leads to consumer savings of at least 10% of annual sales in the relevant market. However, from the regulator’s perspective it is notoriously difficult to identify cartels. Even more difficult is to prove that some illegal conspiracy actually occurred: Do companies coordinate their actions by means of informal meetings in a hotel room in some remote location? Or do companies act after observing each other’s actions without exchanging a word or a text message? Both ways to coordinate actions may reduce consumer welfare, while only the former is punishable … Read more
With the adoption of the Single Resolution Mechanism (SRM) the European Union (EU) established the second crucial pillar of the European Banking Union (EBU), further promoting the financial stability and efficiency of the European banking system. The EU made this significant progress not by design but by the force of necessity – the crisis rendered compelling the centralization of powers for the supervision and resolution of banks at the EU (‘federal’) level. This article briefly introduces the structural components of SRM, as well as discusses the decision-making process for the placement of a bank … Read more
2014 was a very active year for financial regulation in the European Union (EU). There was a push to finalise much of the outstanding primary legislation on the regulatory reform agenda in advance of the European Parliamentary elections in May 2014. This resulted in the adoption of many EU Regulations and Directives in the first half of the year. However, much still remains in the in-box of EU legislators and regulators. Most of the legislation that has been adopted envisages a significant amount of further legislation and rulemaking regulation in the form of delegated regulations to be adopted
Global banking has entered a new era in which every region, product, and legal entity is going to be closely regulated.
To assess the current status and future effects of regulatory reform, we have classified the entire spectrum of regulatory reforms, grouping them into three clusters: financial stability, prudent operations, and resolution and separation. (See Exhibit 1.)
Financial Stability: Expectations Exceed Regulators’ Intent
Since the crisis began, establishing and safeguarding global and local financial stability have been regulators’ highest priorities. As a result, financial stability is the most developed area of reform. Fundamental requirements have been revised or reinstated, primarily … Read more
Thomas Jackson famously described the role of all bankruptcy law as reducing the incentive for individual enforcement against the assets of a distressed company. Although scholars have debated other aspects of Jackson’s thesis, most have continued to identify with this as a central tenet of bankruptcy law. In a recent working paper, Rethinking the Role of the Law of Corporate Distress in the Twenty-First Century, I propose a new taxonomy: the law of corporate distress comprised of insolvency law and restructuring law. I suggest that Thomas Jackson’s description remains apt for part of that taxonomy but draw a distinction … Read more
The following post comes from Elizabeth Howell, a doctoral student in law at the University of Oxford and a visiting scholar at Columbia Law School in the Fall Semester 2014. It is related to her paper, ‘Short Selling Reporting Rules in the EU and the US: A Greenfield Area’ that is forthcoming in the European Company Law Journal. Further details are available here http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2536523.
Short selling reporting obligations can be helpful to regulators, particularly in relation to deterring abusive behavior. Following the recent financial crisis, the European Short Selling Regulation (the ‘Regulation’) introduced a common framework for short … Read more