Let’s Talk: What FinReg Can Learn from New Governance (and Vice Versa)

2019 ◽  
Vol 44 (04) ◽  
pp. 1241-1250
Author(s):  
Kimberly D. Krawiec
Keyword(s):  
Civil Rights ◽  
Outcome Measures ◽  
Financial Institutions ◽  
Financial Regulation ◽  
New Governance ◽  
Ex Post ◽  
Ex Ante ◽  
The Law ◽  
Endogenous Process ◽  
Do So

Lauren Edelman’s Working Law: Courts, Corporation, and Symbolic Civil Rights (2016) is remarkably relevant to the study of financial regulation. In particular, three factors that Edelman identifies as contributing to legal endogeneity and symbolic compliance—ambiguous law, a lack of clear outcome measures, and the presence of legal intermediaries—are especially salient in this context. It has long been recognized that powerful financial institutions and the lawyers, lobbyists, and other agents who serve them have the ability to influence the law ex ante, through political lobbying. Edelman’s work reinforces the point that they may also do so ex post through an endogenous process of interpretation, implementation, and, ultimately, enshrinement of symbolic compliance with ambiguous law.

Fiduciary Law and Financial Regulation

2019 ◽  
pp. 849-870
Author(s):  
Howell E. Jackson ◽  
Talia B. Gillis
Keyword(s):  
Financial Services ◽  
Financial Regulation ◽  
Legal Requirements ◽  
Fiduciary Duties ◽  
Rule Based ◽  
Financial Firms ◽  
Financial Regulations ◽  
Judicial Decisions ◽  
Ex Post ◽  
Ex Ante

This chapter explores the application of fiduciary duties to regulated financial firms and financial services. At first blush, the need for such a chapter might strike some as surprising in that fiduciary duties and systems of financial regulation can be conceptualized as governing distinctive and nonoverlapping spheres: fiduciary duties police private activity through open-ended, judicially defined standards imposed on an ex post basis, whereas financial regulations set largely mandatory, ex ante obligations for regulated entities under supervisory systems established in legislation and implemented through expert administrative agencies. Yet, as the chapter documents, fiduciary duties often do overlap with systems of financial regulation. In many regulatory contexts, fiduciary duties arise as a complement to, or sometimes substitute for, other mechanisms of financial regulation. Moreover, the interactions between fiduciary duties and systems of financial regulation generate a host of recurring and challenging interpretative issues. The chapter explores the reasons fiduciary duties arise so frequently in the field of financial regulation and provides a structured account of how the principles of fiduciary duties interact with the more rule-based legal requirements that characterize financial regulation. As grist for this undertaking the chapter focuses on a set of roughly two dozen judicial decisions and administrative rulings to illustrate its claims.

scholarly journals Banking Crisis Management, Recovery and Resolution Planning, and “New Governance” Theory: Approaching “Living Wills” as a Public-Private Collaborative Form of Regulation

2018 ◽  
Vol 15 (4) ◽  
pp. 772-804 ◽  
Author(s):  
Andrea Minto
Keyword(s):  
Crisis Management ◽  
Financial Regulation ◽  
Power Sharing ◽  
Living Wills ◽  
Market Failures ◽  
New Governance ◽  
Public And Private ◽  
Regulatory Strategies ◽  
Ex Post ◽  
Governance Theory

Over the last ten years the architecture of financial regulation and supervision in Europe has undergone sweeping changes. The demise of the previous “laissez faire era” unleashed an extraordinary torrent of EU institutional and regulatory reforms. Approaches, methodologies and tools by which financial institutions are regulated have drastically been revised to cope with the increasing complexity of modern financial intermediation. New forms of collaborative and polycentric governance in fact emerged as to better respond to sophisticated market failures, opening up to amplified participation and power-sharing between “public” and “private” actors. Crisis management and bank resolution represent an interesting area where regulators reserved some room for a public-private collaborative form of regulation. While there is some extensive scholarship placing recovery and resolution planning at the intersection of ex ante and ex post regulatory strategies, little attention has been paid to the specific modes of interaction between regulators and regulated entities. This study aims to advance knowledge by assessing the main features of “living wills” regulation in the light of the “new governance” theory. In so doing, it emphasizes the advantages of a dynamic cooperation between public (governments, regulators) and private (regulated) parties in overcoming looming market failures such as informational asymmetries and moral hazard.

scholarly journals Standing Room Only: Why Fourth Amendment Exclusion and Standing Can No Longer Logically Coexist

2017 ◽  
Author(s):  
Sherry F. Colb
Keyword(s):  
Police Officers ◽  
Fourth Amendment ◽  
Criminal Activity ◽  
Exclusionary Rule ◽  
Ex Post ◽  
Ex Ante ◽  
The Law

Standing Room Only: Why Fourth Amendment Exclusion and Standing Can No Longer Logically Coexist argues that the Fourth Amendment standing doctrine is fundamentally incompatible with the existing Fourth Amendment exclusionary rule. Fourth Amendment standing provides that only a person who has suffered an invasion of her own normatively reasonable expectations of privacy, given the facts about her situation that police may not even know (including whether she owns the property searched), may suppress evidence that police turned up through a violation of the Fourth Amendment. Meanwhile, the existing exclusionary rule doctrine maintains that the sole objective of Fourth Amendment suppression is to motivate police officers, given facts available to them (such as whether they have probable cause), to conform their conduct to the law prohibiting unreasonable searches and seizures. This Article proposes that by taking into account the actual facts about the defendant’s situation in assessing her standing to bring a suppression motion, it is arbitrary to consider the fact that she did (or did not) have an ownership right in the property where the search occurred, while simultaneously ignoring the fact that she was engaged in criminal activity within that property. This Article accordingly concludes that the ex ante perspective involved in determining whether the police have misbehaved (and thus need to be deterred through exclusion), is logically at odds with the ex post perspective involved in assessing whether the person seeking suppression was in fact entitled to remain free of the search that uncovered evidence against her. The Article takes a close look at the case of Minnesota v. Carter as a perfect illustration of this doctrinal incoherence.

Responding to Threats of Terrorism: How the Law can Generate Appropriate Incentives

2007 ◽  
Vol 19 (1) ◽  
pp. 35-55 ◽  
Author(s):  
Anthony Ogus
Keyword(s):  
Law And Economics ◽  
Cost Effective ◽  
Preventative Measures ◽  
Ex Post ◽  
Ex Ante ◽  
Regulatory Measures ◽  
The Law

A law-and-economics framework of analysis is adopted to assess the likely effectiveness of counter-terrorist regulatory measures. The analysis suggests that ex post deterrence measures are likely to be less cost-effective than ex ante preventative measures, and, among the latter, controls restricting access to weapons and increasing security at potential targets are likely to be more cost-effective than those restricting the movements of suspected individuals

Financial Stability, Systemic Risk, and Taxpayers’ Money—The Rationale for a Special Resolution Regime

2016 ◽  
Author(s):  
Michael Schillig
Keyword(s):  
Moral Hazard ◽  
Market Efficiency ◽  
Financial Institutions ◽  
Systemic Risk ◽  
Financial Stability ◽  
Financial System ◽  
System Stability ◽  
Cross Border ◽  
Ex Post ◽  
Ex Ante

Special resolution regimes are generally introduced with the objective of helping to ‘maintain financial stability, minimize systemic risk, protect consumers, limit moral hazard and promote market efficiency’. The recurring themes are financial stability, systemic risk, and taxpayers’ exposure to losses. This chapter explores whether and to what extent a special resolution regime for banks and financial institutions can contribute to the enhancement of financial (system) stability and can limit systemic risk. It seeks to clarify these concepts and discusses possible ex ante incentives that a (recovery and) resolution regime may provide for controlling systemic risk. Further, it focuses on ex post remedies for the curtailment of systemic risk, and considers the international and cross-border implications.

Ex Ante vs. Ex Post

2017 ◽  
Author(s):  
Donald A. Wittman
Keyword(s):  
Majority Rule ◽  
Law And Economics ◽  
Time Dimension ◽  
Secured Debt ◽  
Sequence Of Events ◽  
Ex Post ◽  
Unsecured Debt ◽  
Ex Ante ◽  
The Law ◽  
The Right

Sometimes the sequence of events is important for establishing rights and obligations, and sometimes it is not. For example, if a nuisance was there before the neighbouring residences arrived, the nuisance is sometimes allowed to continue in the same location under the doctrine of coming to the nuisance. When and why should the doctrine be (or not be) upheld? While many concepts in law and economics do not explicitly have a time dimension, once we start thinking about ex ante versus ex post, a large number of seemingly unrelated areas of the law involve similar issues of sequence. When new regulations are imposed, sometimes pre-existing businesses are exempt and sometimes not. In accident law, negligent behaviour by the first actor may require the second actor to take action beyond the ordinarily efficient actions as can be seen in the doctrine of last clear chance. What is the underlying rational for the application of this rule? Rights typically go to the highest bidder, but at 4-way stop signs, rights are granted according to who was there first. In other areas involving traffic, being first accedes to other criteria such as majority rule. As a final example, priority in bankruptcy gives the right to the first creditor of the same secured debt, but not to the first creditor of unsecured debt. Why? This article presents an efficiency-based framework for answering these questions.

Dictating the Risk: Experimental Evidence on Giving in Risky Environments: Comment

2016 ◽  
Vol 106 (3) ◽  
pp. 836-839 ◽  
Author(s):  
Michal Krawczyk ◽  
Fabrice Le Lec
Keyword(s):  
Experimental Evidence ◽  
Implicit Assumption ◽  
Dictator Games ◽  
Ex Post ◽  
Ex Ante ◽  
The Asymmetry ◽  
Do So ◽  
Observed Behavior

Based on experimental dictator games with probabilistic prospects, Brock, Lange, and Ozbay (2013) conclude that neither ex post nor ex ante comparisons can fully account for observed behavior. We argue that their conclusion that ex ante comparisons cannot explain the data is at best weakly supported by their results, and do so on three grounds: (i) the absence of significant differences between the most relevant treatments, (ii) the implicit assumption of subjects' risk neu trality, and (iii) the asymmetry of treatments regarding the disclosure of dictators' choice. (JEL C72, D63, D64, D81)

Oregon’s K–12 Ethnic Studies Bill

2019 ◽  
Vol 42 (2) ◽  
pp. 180-195
Author(s):  
Shirley A. Jackson
Keyword(s):  
Civil Rights ◽  
Indigenous Peoples ◽  
Ethnic Studies ◽  
Original Intent ◽  
Racial And Ethnic Minorities ◽  
Protected Group ◽  
Social Minorities ◽  
K 12 ◽  
Racial Ethnic ◽  
Do So

In 2017, Oregon passed House Bill 2845 requiring Ethnic Studies curriculum in grades K–12. It was the first state in the nation to do so. The bill passed almost fifty years after the founding of the country’s first Ethnic Studies department. The passage of an Ethnic Studies bill in a state that once banned African Americans and removed Indigenous peoples from their land requires further examination. In addition, the bill mandates that Ethnic Studies curriculum in Oregon's schools includes “social minorities,” such as Jewish and LGBTQ+ populations which makes the bill even more remarkable. As such, it is conceivable for some observers, a watered-down version of its perceived original intent—one that focuses on racial and ethnic minorities. Similarly, one can draw analogies to the revision of the Civil Rights Bill of 1964 when it included women as a protected group. Grounded in a socio-political history that otherwise would not have been included, this essay examines the productive and challenging aspect of HB 2845. Framing the bill so it includes racial, ethnic, and social minorities solved the problem of a host of bills that may not have passed on their own merit while simultaneously and ironically making it easier to pass similar bills.

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