Latham & Watkins Discusses CFTC No-Action Relief on IBOR Transition

By Yvette D. Valdez, Adam Bruce Fovent and J. Ashley Weeks September 18, 2020 by snehapandya

On August 31, 2020, three divisions of the US Commodity Futures Trading Commission (CFTC) issued revised no-action letters providing additional relief to swap dealers (SDs), end users, and other market participants from registration requirements; business conduct standards; uncleared swap margin …

Regulations as Automatic Stabilizers During Crises

By Xi Wu July 16, 2020 by renholding

Even in the best of times, corporate leaders gripe about the cost of government regulations. An average hedge fund spends more than 7 percent of its total operating costs on various forms of compliance.^[1] For the banking industry, compliance …

The Effects of Mandatory Disclosure Rules on Hedge Fund Governance

By Colleen Honigsberg December 17, 2019 by renholding

In a new paper, I add to the debate over hedge fund regulation by introducing empirical evidence that hedge fund registration requirements reduce misreporting. Using three alternating changes in hedge fund regulation, my study finds consistent evidence that registration reduces …

Wachtell Lipton Discusses Stakeholder Governance: Issues and Answers

By Martin Lipton and William Savitt October 25, 2019 by renholding

The Business Roundtable’s recent call for a commitment to long-term sustainable economic value creation has prompted a vigorous debate about the optimal corporate governance model for achieving that goal.

Certain familiar arguments have reappeared in reaction to the Business Roundtable’s …

Why We Shouldn’t Regulate Reputation Risk at Banks

By Julie Andersen Hill June 13, 2019 by renholding

What do payday lenders, firearms retailers, porn stars, churches, coal mines, and condom companies have in common? All have complained that regulators pressured financial institutions to close their accounts over reputation-risk concerns. In a my article (available here), forthcoming …

Network-Sensitive Financial Regulation

By Luca Enriques, Sandro Romano and Thom Wetzer June 10, 2019 by renholding

Shocks to only part of the financial system, such as the collapse of the subprime mortgage market in 2007, can spread and intensify through the complex interconnections among financial and non-financial institutions to become systemic threats. The consequences can be …

Regulatory Arbitrage, Unclear Terminologies: A Challenge to Global Cryptoasset Regulations

By Apolline Blandin, Michel Rauchs and Hatim Hussain May 29, 2019 by renholding

Few innovations in finance have emerged in recent years that are as controversial or present as many challenges to regulators and policymakers as cryptoassets. A key question for regulators and market participants is the extent to which the difference between …

The Future of Data Driven Finance: Financial Regulation, Data Regulation, and RegTech

By Dirk A. Zetzsche, Douglas W. Arner, Ross P. Buckley and Rolf H. Weber April 15, 2019 by renholding

Fifty years ago, banking was a relationship business. Bank managers collected information about depositors and borrowers from all sorts of sources, formal and informal. In recent decades, credit decisions have become far more data-driven, with companies like Amazon and the …

SEC Commissioner Offers Inside View of the Regulation Machine

By Hester M. Peirce February 13, 2019 by renholding

I had high expectations when I picked up Thom [Lambert’s] book on regulation shortly after it first came out several years ago.[1] Those expectations were exceeded by the clear and compelling way in which the book wrestles with the

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When Good Incentives Are Not Enough: The Quest for Financial Data Standardization

By Richard Berner and Kathryn Judge January 29, 2019 by renholding

Data standardization – the process of developing and implementing rules for how data are described and recorded – offers significant benefits for financial firms and regulators. Nonetheless, the topic has received only scant attention from academics, and regulatory efforts to …

Skadden Discusses CFTC Division of Enforcement’s First Annual Report

By David Meister, Jonathan Marcus and Daniel B. O'Connell November 27, 2018 by renholding

On November 14, 2018, the Commodity Futures Trading Commission (CFTC) Division of Enforcement released an annual report, apparently the first of its kind.¹ In a speech given at New York University School of Law, James M. McDonald, director of …

Insider Trading: Are Insolvent Firms Different?

By Andrew Verstein November 5, 2018 by renholding

Are insolvent firms different from solvent firms with respect to insider trading law and policy? Formally, the law does not change. But economic realities and non-securities law duties do. As a result, the insider trading landscape changes considerably. The law …

The Underappreciated Dilemmas of Overlapping Financial Regulations

By Matthew C. Turk October 25, 2018 by renholding

Calls to dismantle the legal framework that was developed in response to the financial crisis have begun to multiply and gain momentum. Pursuant to a Trump Administration executive order, the Treasury Department has released a series of reports that undertakes …

Latham & Watkins Discusses Principles Guiding FINRA Enforcement Action

By John J. Sikora, Jr., Stephen P. Wink and Gregory Mortenson September 27, 2018 by renholding

The Financial Industry Regulatory Authority (FINRA) relies on a framework of core principles in deciding whether to bring an Enforcement action in response to a given set of facts, and the key consideration is an assessment of “risk.” These core …

SEC Commissioner Airs Her Beef With Stakeholders

By Hester M. Peirce September 26, 2018 by renholding

Last time I flew to California, the skies were so clear that I was able to keep an eye on the changing landscape below all the way across the country. The vastness and great variety was striking. Having grown up

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Did Deregulation End the “Quiet Period” of Low-Risk Banking?

By Paul G. Mahoney September 18, 2018 by renholding

From the New Deal until the 1970s, banks were on a tight leash. Regulators controlled the rate of interest they could pay on deposits. Banks could not underwrite or deal in corporate securities. With some exceptions, they could not expand …

The Deregulation Debate: The Challenge of Using Static Rules to Govern a Dynamic System

By Kathryn Judge September 18, 2018 by renholding

In their lively disagreement about the role of deregulation in contributing to the 2007-2009 financial crisis, professors Arthur Wilmarth and Paul Mahoney inadvertently illuminate why the processes through which finance is regulated are so ill-suited to that purpose. Finance is …

How Private Equity Enhances the Market for Corporate Control and Capitalism

By Edward Peter Stringham and Jack Vogel September 13, 2018 by renholding

In this age of firebrand political rhetoric and sniping from the right and the left, Wall Street has taken more than its fair share of criticism. One of the most significantly misplaced criticisms, however, derives from a gross misunderstanding of …

Disclosure Regulation in the Commercial Banking Industry: Lessons from the National Banking Era

By João Granja September 12, 2018 by renholding

In the aftermath of the 2007—2009 financial crisis, policymakers around the globe responded to calls for greater transparency in the financial system by adopting new rules and institutions that required more and better information disclosure by financial institutions. For example, …

Lehman Brothers: How Good Policy Can Make Bad Law

By Kathryn Judge September 11, 2018 by renholding

As we approach the 10-year anniversary of the failure of Lehman Brothers, the news is again awash in a debate about whether policymakers could have saved the investment bank. That the issue remains so deeply contested reflects how fundamentally flawed …

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Columbia Law School's Blog on Corporations and the Capital Markets

Regulation