Columbia Law School
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Finance & Economics
PwC Discusses Fed’s New Board Expectations Guidance
On August 3, the Federal Reserve (Fed) proposed for comment supervisory guidance for boards
of directors of Fed-supervised institutions1 (i.e., Board Effectiveness (BE) guidance). The proposed BE guidance is the result of a multi-year review by the Fed of …
Corporate Bond Trading on an Exchange
An over-the-counter (OTC) market and an open limit order book (LOB) market are the two common mechanisms for organizing financial markets. An OTC is a decentralized market, where trades occur only through dealers. The dealers’ quotes are not fully transparent …
PwC Discusses Bank Resolution Plans’ Public Sections
The recently released public sections of the 2017 resolution plans submitted by the eight US global systemically important banks (G-SIBs)1 provide a unique window into the banks’ resolution planning efforts that have developed over the last five years. Notably, …
The Beginnings of the U.S. Capital Gains Tax Preference
With the recent release of the Trump administration’s tax plan, discussions of tax “reform,” or at least tax cuts, are once again at the center of American law and politics. Although the president’s tax plan is short on details, it …
Targeting Corporate Inversions: Are We Doing the Right Thing?
Congress, the U.S. Department of the Treasury (“Treasury”), and countless legislators have criticized corporate inversions — mergers designed to help American companies lower their tax bills by moving overseas — since McDermott International completed the first one in 1982. Nearly …
What Responsibilities Do Sovereign Funds Have to Other Investors?
With trillions of dollars in assets, sovereign wealth funds (SWFs) play a major role in financial markets around the world. With billions (and perhaps trillions) of dollars’ worth of equity investments around the world, the investment behavior of SWFs is …
How Substitutable Are Workers? Evidence from Worker Deaths
The fluidity of labor markets depends on the ease with which one side of the market can fulfill the needs of the other: whether workers can find employment that suits their skills and firms can find adequate substitutes for workers …
Jones Day Discusses IRS Rulings on Spin-Off Issues
In Short
The Situation: The IRS had discontinued issuing private rulings on certain transactions related to spin-offs, leaving companies to wonder if favorable tax treatment was likely.
The Action: Recent IRS guidance announced the resumption of private rulings in transactions …
How Tax Policy Favors Robots over Workers and What to Do About it
There is a longstanding and growing public debate about the costs and benefits of automation. Earlier this year, Bill Gates argued that robots who take human jobs should pay taxes. Mark Zuckerberg recently warned the graduating class at Harvard University …
How to Regulate TechFins and Data-Based Finance
In a new research paper, we consider the impact of a group of new entrants into financial services and regulation. These new entrants include technology, e-commerce, social media, and telecommunications companies with often large pre-existing bases of non-financial services customers. …
Fed Governor Brainard Discusses Why Opportunity and Inclusion Matter to U.S. Economy
I want to thank Neel Kashkari for launching the Opportunity and Inclusive Growth Institute and for inviting me to join the deliberations of this distinguished group today [May 22]. This new Institute is another great example of how individual Reserve …
Are Hedge Funds Worth As Much As They Say They Are?
In 2001, hedge fund manager Cliff Asness co-wrote a famous paper, Do Hedge Funds Hedge?1 Sixteen years later, amid significant changes in the industry, it’s worth asking, Are hedge funds worth as much as they say they are? And …
The Monitoring Role of the Media: Evidence from Earnings Management
The news media are an important source of information for the U.S. capital markets, especially when drawing attention to questionable behavior of corporate executives. Coverage can, however, pressure companies into making dubious financial decisions like emphasizing short-term earnings over long-term …
Better Responses to Financial Crises
How can regulators best respond to financial crises? In a forthcoming article in the Duke Law Journal, I show how a law-and-economics framework can guide regulators’ responses. There are two kinds of remedies for failing to comply with a law: …
A Tax on Aggressive Tax Planning
Tax planning by multinational enterprises (MNEs) is estimated to generate a worldwide loss of corporate tax revenues of between $100 billion and $240 billion. U.S.-based MNEs alone are believed to retain a total of $2 trillion in earnings outside the …
Fed Vice-Chair Fischer Discusses Committee Decisions and Monetary Policy Rules
It is a pleasure to be at the Hoover Institution again. I was privileged to be a Visiting Scholar here from 1981 to 1982. In addition, many of the researchers and practitioners with whom I have discussed monetary policy over …
The Agency Costs of Teamwork
It is common wisdom among transactional lawyers that good teamwork results in smoother deals and better service for their clients. Perhaps for this reason, capital-markets practices frequently tout their teamwork skills as a source of value for clients, especially in …
Insiders’ Investment Horizons Matter in Interpreting Their Trades
Executives, directors and other corporate insiders have privileged access to material non-public information. Previous research shows that trades by insiders are informed, on average. For example, insider purchases tend to precede positive stock returns. In addition, like other investors, corporate …
Federal Reserve Vice Chairman Stanley Fischer Discusses International Effects of Recent Policy Tightening
I appreciate your invitation to participate in this [April 19] panel discussion. In my remarks, I will discuss how U.S. monetary policy actions affect our foreign trading partners, with particular focus on how foreign economies have responded to the Federal …