Digitalization of Finance, Covid19 and TechRisk

Over the past 50 years, technology has transformed finance. During the 2010s, FinTechs, typically small, agile start-ups, were the focus of much of the attention. In our view, the focus of attention across the 2020s will be something entirely different: digital finance platforms. Quietly, behind the scenes, digital financial platforms are increasingly serving as indispensable […]

Recent Announcements Reveal Financial Regulators are Serious about Climate Change

Several major announcements over the past two weeks indicate U.S. financial regulators are finally starting to take climate change seriously. The timing is no coincidence. The election of Joe Biden as our next president freed financial regulators from facing the wrath of President Trump and his acolytes for simply acknowledging that climate change is real. […]

WHAT THE E.U. DRAFT DIRECTIVE MEANS FOR U.S. COMPANIES’ CLIMATE-RELATED FINANCIAL RISK DISCLOSURES

This post first appeared on the Climate Risk Disclosure Lab website. The Lab is a collaboration between the Global Financial Markets Center at Duke Law, Duke’s Nicholas Institute for Environmental Policy Solutions, and the National Whistleblower Center. Building upon prior European Union (“EU”) disclosure initiatives including the 2010 Timber Regulation and the 2017 Conflict Minerals Regulation, the […]

Board Risk Oversight and Environmental and Social Responsibility

Risk oversight is one of the primary responsibilities of boards of directors. While boards have traditionally focused on the oversight of financial compliance, credit, and liquidity risks, they are increasingly being pressured – by regulators, investors, and other stakeholders – to provide oversight over a broader range of risks that threaten the achievement of firm […]

Public Debt and Household Lending

For a large number of European economies, real estate accounts for more than 70% of wealth, whereas financial assets usually account for below 20%.  From a macroeconomic perspective, the large exposure to the real estate market represents both a vulnerability and a source of resilience: on the one hand, it exposes a large share of […]

Who’s Afraid of the Big Bad Debt?

The coronavirus continues to exact an enormous human and economic toll. To prevent economic collapse, the federal government has pulled out all the stops, resorting to both monetary policy and fiscal policy. Monetary policy cannot go it alone, especially in our current crisis. Having all but zeroed out interest rates, the Federal Reserve currently has […]

A Review of “Taming the Megabanks: Why We Need A New Glass-Steagall Act”

The structure of the banking industry and the nature of what is commonly called “banking” has changed dramatically over the last twenty-five years as the result of the dissolution of legal restrictions on interstate banking and branching, as well as on the financial services that banking organizations can offer.  Deregulation has accelerated banking industry concentration. […]

The Green New Deal: Historical foundations, economic fundamentals and implementation strategies

The New Deal was a bonds financing strategy of the United States of America between 1932 and 1939. In total, 15 to 35 billion was spent on a series of development programs that funded public work projects, financial reform, and economic development. Franklin D. Roosevelt’s overarching goal for the project was to relieve and reform […]

Primary Corporate Bond Markets and Social Responsibility

The increasing importance of corporate objectives beyond narrowly defined profit maximization has arguably been one of the most fundamental trends in financial markets over recent years. Environmental and social objectives (we explicitly exclude governance aspects from our analysis), denoted as ES, are now explicitly recognized by a large number of asset managers and institutional investors […]

Distributional Effects of Bank Bailouts

Financial crises lead to policy interventions that carry significant fiscal costs (Laeven and Valencia, 2013). While policy makers prefer to follow the prescription in Bagehot (1873) that public funds should only be provided to institutions that are expected to repay them, it is difficult to determine ex ante an institution’s ability to repay. The resulting […]