Sky Blog
As the threat of an unprecedented default in U.S. government debt plays out over the coming months, the United States is in uncharted territory. And so are directors and management teams at corporates, whether public or private. While there have …
In business schools, managers are taught to maximize the net present value (NPV) of future cash flows. In the real world, managers consistently ignore this advice. When asked, they repeatedly say they maximize earnings per share (EPS). “Firms view earnings, …
The best way out of the bank stability problem revealed by the run on Silicon Valley Bank – but spreading to other banks – may be a new style of prime money market fund (“MMF”) that, unlike existing prime MMFs, …
The sudden collapse of Silicon Valley Bank (SVB) surprised many investors and industry experts, given the bank’s recent accolades and long-standing reputation as one of the best national and regional banks in the U.S.[1]Moreover, there had been no …
Within the world of corporate governance, there has hardly been a more important recent development than the rise of the Big Three asset managers — Vanguard, State Street Global Advisors, and BlackRock. Due to the popularity of index funds and …
The failure of Silicon Valley Bank to find a buyer opens up the possibility (and the need) for a new kind of bank that is focused on financial stability as well as the traditional banking functions of lending and running …
In a forthcoming article, I observe that commercial law has uncertain boundaries, challenging the traditional view that commercial law is a separate and distinct body of law. Various provisions of the Uniform Commercial Code (UCC) may be overinclusive, conflicting …
Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access …
The steady growth of sustainable finance in recent years poses difficult questions on how regulators should approach it. In the European Union (EU), for example, there has been an explosion of new rules aimed at addressing a broad array of …
Public pension funds and labor union funds (together “labor’s capital”) have faced years of criticism from both the left and the right. The current battle between ESG and anti-ESG advocates, and the introduction of legislation at the state level trying …
What is the effect of stock indexing on information arbitrage and the efficacy of the price discovery process? Forty-five years after John C. Bogle, the Vanguard Group founder, launched the world’s first index mutual fund, and 30 years after the …
Commercial use of artificial intelligence (AI) is accelerating and transforming nearly every economic, social, and political domain. Yet, academic commentary on algorithmic decision-making in financial services has warned that historical data could result in biased algorithmic tools.[1] Bias, among …
The Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the agencies) are issuing the following statement on crypto-asset1 risks to banking …
On December 27, 2022, Treasury released Notices 2023-7 and 2023-2 (the “Notices”). The Notices provide initial guidance on the 15% corporate minimum tax on the book income of large corporations (the “CAMT”) and the non-deductible 1% excise tax on certain …
FTX[1] is a Bahamas-based cryptocurrency exchange founded in 2019 that, at its peak in 2021, had over 1 million users, making it the world’s third largest crypto exchange by volume. Since November 11, 2022, though, FTX has been in …
Members of Congress and financial regulators from the Federal Reserve, U.S. Treasury, SEC, CFTC, and CFPB appear set on regulating the crypto trading system (traded coins and associated marketplaces, exchanges, brokerages, lending, staking, derivatives, intermediaries, and enablers) as part of …
Student loans are becoming a major challenge for the United States. An estimated 43 million borrowers owe about $1.6 trillion dollars, meaning a significant fraction of U.S. households is burdened with debt that is not dischargeable in bankruptcy. The problem …
In 2020, the United States-Mexico-Canada Agreement (“USMCA”) entered into force, replacing the 1994 North American Free Trade Agreement (“NAFTA”). Both treaties include certain protections that the contracting states must afford to nationals of the other contracting states investing in their …
The report recently issued by the Financial Stability Oversight Council (FSOC) is quite different from the other reports published so far by the U.S. financial regulators in response to Executive Order 14067 on digital assets (FSOC Report).1 Helpfully, this …