Sky Blog
One of the keys of successful private equity investing is properly aligning the economic incentives and interests of the sponsor and its portfolio companies’ management teams as they evolve over time. Unlike a public company, where management may receive higher …
In derivatives markets, as in other financial markets, customers rely on intermediaries for access to products. When transacting, a customer faces a choice of whether to return to a prior provider or seek a new one. My post yesterday documented …
Derivatives are financial instruments used to shift risks, such as fluctuations in interest rates or foreign exchange rates or changes in the value of assets such as stocks, bonds, metals, or agricultural or energy products. At first glance, entering into …
We argue that bank regulation and supervision interfere with pricing risk by creating opacity. Given that market disclosures enhance the efforts of supervisors, and vice versa, more disclosure could enhance financial stability (see Spatt, 2010)[1]. In addition, we …
An increasing number of states have enacted or are considering enacting legislation requiring financial institutions to provide customers “fair access” to financial services. These fair access requirements, first appearing in Florida’s House Bill 3 (2023) (“FL HB 3”), generally prohibit …
California enacted its own version of New York’s “BitLicense” law, the Digital Financial Assets Law (DFAL),[1] becoming one of the first US states to implement a virtual-currency-specific regulatory regime. Prior to the enactment of …
It’s surprisingly tough to find detailed information about the loan agreements of many public companies. In fact, nearly 20 percent of those agreements are not publicly available, despite disclosure mandates. In a recent study, we shed light on this phenomenon, …
Central bank digital currencies (CBDCs) are coming. Around the world, central banks are building CBDCs for testing in trials and pilots, both domestic and cross-border. However, when we talk about CBDCs – especially in international discussions – it is clear …
Funds that speculate in sovereign debt, so-called “vulture funds,” are often roundly criticized. They purchase distressed debt on the secondary market at reduced prices and then seek payment in court at face value plus interest, penalties, and fees.[1] Although …
Two federal district courts recently upheld decisions by the Federal Reserve Bank of Kansas City (FRBKC) and the Federal Reserve Bank of San Francisco (FRBSF) to deny master account applications from Custodia Bank (Custodia) and PayServices Bank (PayServices). Custodia has …
The rapid escalation in uninsured deposit runs in March 2023 led to chaotic intervention with potentially severe fiscal implications. The runs spotlighted once again the limit on prudential norms. Since the collapse of SVB, Credit Suisse, and other smaller banks …
In a recent opinion piece in the Washington Post, former FDIC Chair Sheila Bair and leading British bank historian Charles Goodhart argued in favor of the executive compensation clawback provision in the proposed RECOUP Act, which we analyzed …
In a new article, I attempt to build a systematic framework for regulating FinTech-driven innovations. In doing so, I clarify and simplify the confusing terminology that makes FinTech appear more complicated than it is.
“FinTech” refers to the use of …
Regulators globally are requiring companies to disclose their greenhouse gas (GHG) emissions. For companies in some industries, Scope 1 and 2 emissions – covering, respectively, emissions from direct fuel use and from acquired energy – will cover most relevant emissions …
The Federal Deposit Insurance Corporation (FDIC) released a Proposed Statement of Policy on Bank Merger Transactions (the Proposal) that outlines the FDIC’s views on its jurisdiction and expectations with respect to each statutory factor under the Bank Merger Act (BMA).…
It has been a year since Silicon Valley Bank failed, and one of the major policy questions that emerged – what to do about deposit insurance? – remains unresolved. Banking is an industry that needs public confidence to function, and …
Despite facing challenges both from Congress and in court, the Consumer Financial Protection Bureau’s (CFPB’s) “Small Business Lending Under the Equal Credit Opportunity Act (Regulation B)” (Small Business Rule) is likely here to stay.
In December 2023, President Biden vetoed …
The Inflation Reduction Act of 2022 (IRA) allows so-called “applicable entities” to elect to treat certain renewable energy tax credits as payments of federal income tax, generating a refund payment from the IRS (refundable tax credits or elective payment). Applicable …
In early February, several state and national banking trade associations filed suit in U.S. district court in Texas challenging the federal banking agencies’ first comprehensive updates to the regulations implementing the Community Reinvestment Act (CRA) in nearly three decades. Among …
On February 13, the U.S. Treasury, Financial Crimes Enforcement Network (“FinCEN”) proposed1 (the “Proposed Rule”) to apply affirmative anti-money laundering and countering-the-financing-of-terrorism (“AML/CFT”) program obligations as prescribed by the Bank Secrecy Act (the “BSA…