The Cost of Doing Business: Corporate Crime and Punishment Post-Crisis

For many years, law and economics scholars, as well as politicians and regulators, have debated whether corporate criminal enforcement deters too much beneficial corporate activity or lets corporate criminals off too easily. This debate has recently grown more polarized: On the one hand, academics, judges, and politicians have excoriated enforcement agencies for failing to send individual bankers to jail in the wake of the financial crisis; on the other, the Justice Department has since relaxed policies aimed at holding individuals liable and reduced the size of fines imposed on corporations.

A crucial and yet understudied piece of evidence in this … Read more

Making Consumer Finance Work

In early 2009, with the financial crisis still raging, progressive policymakers  passed legislation upending the credit card industry. This legislation precluded card issuers from changing interest rates without sufficient warning or charging exorbitant late fees. Congresswoman Carolyn Maloney, who sponsored the legislation in the U.S. House, deemed it “historic” protection for consumers from deceptive bank practices. Conversely, Jamie Dimon, CEO of JPMorgan, postulated that restrictions on repricing would cause his bank to stop providing credit to 15 percent of its customers.

A few months later, the Federal Reserve amended its rules to disallow the levying of overdraft fees on consumers … Read more