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 […]

Has the CARES Act expanded the Fed’s legal mandate?

When the Covid-19 outbreak became a national emergency in the United States, the Federal Reserve, having learned the lessons from the last crisis, was quick and bold in reacting. In only nine days, from March 15 to March 23, the Fed cut its target for the federal funds rate, provided forward guidance, intervened in markets […]

Sustainable Finance and Fintech: Can Technology Contribute to Achieving Environmental Goals? A Preliminary Assessment of ‘Green FinTech’

The EU’s Fintech Action Plan (now Digital Finance Strategy) and the Sustainable Finance Strategy represent important pillars of the bloc’s current policy agenda. While the two areas have been treated as separate for a long time, they present certain common features and great potential if combined. The COVID-19 pandemic provides an opportunity for countries in […]

The Architecture of Decentralised Finance Platforms in the Post COVID-19 Era – A New Open Finance Paradigm

During the COVID-19 pandemic a new consensus has emerged which castigates modern finance for its tendency towards excessive leverage, and short-termism. As all this activity took place against a background of disappearing disposable incomes, it is not surprising that it also boosted inequality, especially between the asset-rich and the asset-light classes with the latter having […]

Executive Compensation, Individual-Level Tax Rates, and Insider Trading Profits

Changes in individual-level tax rates represent exogenous shocks to executives’ net compensation. While these shocks may increase or decrease compensation, there is little evidence that firms respond by changing executives’ explicit compensation. One explanation is that executives bear the brunt of any tax rate change by directly reflecting these changes to their own compensation. Alternatively, […]

The Liability of Clearing Brokers to Public Investors

This blog post is offered, in part, as a primer for members of the judiciary, arbitration panels, and the bar who may be faced, perhaps for the first time, with a claim against a “clearing broker.” Understandingly, the role that clearing brokers play in the securities markets is not well understood by the general public, […]

Climate Risk Disclosures & Practices: Highlighting the Need for a Standardized Regulatory Disclosure Framework to Weather the Impacts of Climate Change on Financial Markets

The following is the executive summary of a new report from the Climate Risk Disclosure Lab that highlights the need for a thorough, robust, and mandatory disclosure framework for climate-related information. The report exposes the failure of U.S. regulators to properly incorporate climate change into their mandates and assesses the threats that the vacuum of […]

The Department of Labor Wants to Expose 401(k)s and Pension Plans to Greater Financial Risk from Climate-related Impacts

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.   On June 23, 2020, the Department of Labor (“DOL”) issued a proposed regulation for public comment aimed […]

How Central Banks Can Make the Future of Payments Inclusive

Payment systems are critical infrastructure that generate positive network externalities. The more people who use them, the better off everyone using them is. They allow households, businesses, governments, and nonprofits to clear and settle transactions. People rely on them to receive their income through direct deposit or cashing checks; pay their rent, mortgage, or other […]