Bankruptcy, Bailout, or Bust: Early Corporate Responses to the Business and Financial Challenges of COVID-19

As the nation grapples with the profound human tragedy of COVID-19, U.S. companies have been feeling the business and economic impacts of the global public health crisis. Many companies have already filed for bankruptcy protection, while others have warned that they may need to liquidate or restructure. Business leaders from a wide range of industries […]

Aligning the Financial System and Capital Markets with Long-Term Economic and Public Interest Outcomes

The following post is the author’s combined oral and written testimony presented to the U.S. House Committee on Financial Service’s Subcommittee on Investor Protection, Entrepreneurship and Capital Markets for a hearing entitled, “Climate Change and Social Responsibility: Helping Corporate Boards and Investors Make Decisions for a Sustainable World” on Thursday, February 25, 2021. A video […]

The Source(s) of Corporate Harm

How do corporations cause harm? Courts and legislatures have long subscribed to a simple, straightforward approach: “[T]he corporation touches the public only by the hands of [its] agents and servants.” In other words, according to the law, there is ultimately only one source of corporate harm: individual employees.   In a forthcoming article, I urge reconsideration of that centuries-old legal assumption. The law’s approach would surprise many non-lawyers […]

Continuing Uncertainty After Colorado Compromise: The Limited Impact of the Avant-Marlette Settlement on True Lender Risk for Nonbank-Bank Partnerships

In August 2020, two nonbank fintechs—Avant and Marlette Funding—and their partner banks— WebBank and Cross River Bank—reached a “landmark settlement” with Colorado regulators (the “Settlement”) to determine who is the “true lender” of loans originated under their partnerships. Under the Settlement, the nonbank-bank partnerships are permissible under Colorado law, provided that they comply with the terms of a Safe Harbor that is […]

Crackdown on Tax Avoidance Could Impede Corporate Innovation

Corporate tax avoidance has significantly increased at both the state and federal level over the past three decades. As an important tax avoidance strategy, U.S. firms extensively use intangible assets to shift taxable income from high-tax areas to low-tax areas to reduce income taxes. Therefore, patents and other intangible assets create significant tax benefits for firms.   Governments […]

Partisanship in Loan Pricing

Recent years have seen a heightened level of partisan conflict in the U.S.[1] Both academic research and anecdotal evidence suggest that partisanship generates profound influence on individuals’ beliefs, leading them to selectively incorporate information that is favorable to their own political orientation.[2] In particular, partisanship appears to play a role in influencing individuals’ perceptions of […]

The role of government and private institutions in credit cycles in the U.S. mortgage market

Boom and bust cycles are recurring features in housing markets. These episodes are often associated with significant expansions in the amount of mortgage debt households incur. The mortgage crisis of 2008 was no exception, with a near doubling of outstanding household mortgage debt between 2000 and 2008 in the United States. In this paper, we […]

The Governance of Egypt’s Central Bank Under Its New Law

On September 24th, the Egyptian President ratified Law No. 194 of 2020 on the Central Bank and the Banking Sector, which completely replaced Law No. 88 of 2003. The new law is an outgrowth of the negotiations between the Egyptian Government and the IMF on Egypt’s request for a $2.7 billion grant through the Rapid Financing […]

Intangibles to Tangible: In Search of Firm Value Creation

Intangible assets have become key factors in economics and have received much attention of late. Recent studies focus on the single aspect of intangible-related information, whereas aggregate proxies of intangible assets are scarce. In this post, we introduce our recent working paper in which we construct a comprehensive intangible assets-related measure, I-SCORE, and study 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 […]