Commentary by faculty and affiliates of the Duke Law Global Financial Markets Center
Throughout history, evolving markets were subject to evolution and de-evolution cycles. The nascent market for digital assets is no exception. Since its inception in 2009, the rapid proliferation of the digital asset market in 2016-18 was followed by significant downward corrections in 2018-19 (called the “crypto winter”). Digital assets cover all types of virtual and […]
China’s shadow banking sector has grown rapidly in the last decade. While bank loans still dominate the financial system as a main source of funding, the shadow banking sector reached 32.9 percent of total social financing by 2016, though it then fell to 24.2% percent by 2019. Households and corporations benefit from the growing shadow […]
Commercial law is the legal backbone of markets and economies. Yet, over time, it has evolved into a fragmented bundle of subject-specific legal and regulatory regimes that govern non-consumer transactions and corporate actions. Some of these branches of commercial law have ancient origins, while others are more recent emergences. The laws governing secured transactions and […]
Microprudential regulation aims to prevent the government from being faced with a choice between spending taxpayer money to bailout an insolvent financial institution or suffering a financial and economic collapse. Banking collapses are so costly that it is difficult to resist bailouts when they happen. But the expectation of bailouts generates moral hazard, stoking leverage […]
The COVID-19 crisis is a reminder that resilient and powerful financial and banking systems are essential. In EU member states, the banking sector is the most important part of the financial system and the central source of finance for small and medium enterprises (SMEs), which make up around 99 percent of all EU companies. The […]
In 2017/18, the total market capitalization of cryptocurrency markets reached all-time highs. At the same time, certain projects like BitConnect made their name as one of the most prominent ICO scams. Therefore, a stain remains on the digital asset industry from the accumulation of failed projects and subpar investment returns since the peak of the […]
Excessive risk-taking in the financial sector contributed to the Global Financial Crisis of 2007-2009, leading many policymakers to consider tightening existing regulations or imposing new ones altogether. One such proposal is to tighten bank capital requirements, which have been a cornerstone of international financial regulation since the 1980s. At least part of capital requirements’ attractiveness […]
Industrial banks and industrial loan companies (collectively referred to as “ILCs”) are FDIC-insured, state-chartered depository institutions. In 1987, ILCs received a statutory exemption from the definition of “bank” under the Bank Holding Company Act (“BHC Act”). Congress did not explain the purpose of the 1987 exemption, but many have argued that the exemption allows commercial […]
In recent years, hackers have imposed additional costs to financial infrastructure providers through data theft and service disruptions, leading to losses for both institutions and clients alike. Are institutions reacting appropriately to these threats? How should their clients respond? Most importantly, at what cost? Crime in the Digital World In March of 2017, Equifax—one of […]
Regulation mandating public disclosures by firms does not come without cost. Surveying managers’ beliefs reveals that one of the most important costs is a perceived loss of competitive advantage arising from disclosing proprietary information (i.e., proprietary cost). Almost 60% of CFOs of firms in the United States are concerned that public disclosure regulation affects their […]