The Time Has Come to Mandate ESG Disclosures: Where Should the SEC Start?

Sustainability-focused funds have seen an incredible boost in popularity since the proliferation of ESG roughly a decade ago. ESG—short for environmental, social, and governance—is a company-wide ethos aimed at implementing responsible policies based on these three factors. Sustainable (or ESG) funds select their constituent investments based on a firm-level analysis of these factors. At the […]

The Economics of Securities Regulation

Securities markets are among the most heavily regulated sectors of the economy in developed nations, reflecting their central role in financing businesses and helping households to save for retirement, schooling, and health care, among other things. The costs and benefits of securities laws may accordingly have substantial welfare consequences. My recent paper, “The Economics of Securities […]

Should the States or Federal Government Regulate Fintech?

From lending to payment processing, the core functions of banks are increasingly performed by financial technology (fintech) firms. But U.S. law has struggled to accommodate the rise of fintech. To catch up to the market, state and federal officials have undertaken a diverse array of regulatory initiatives. Numerous regulators have relied on the prevailing paradigm […]

Measuring Compliance: Overcoming Four Challenges and Matching Method to Purpose

Over the past few decades, we have seen the rapid rise of a global “compliance industry.”[1] With the emergence of this industry came criticisms about whether compliance efforts (e.g., compliance programs, trainings) by corporations are truly effective, or whether programs are at best superficial and at worst symbolic[2]. Now more than ever corporations are under pressure […]

SPECIAL PURPOSE ACQUISITION COMPANIES (SPACs) AND THE SEC

Special Purpose Acquisition Companies (SPACs) are simply enterprises that raise money from the public with the intention of purchasing an existing business and becoming publicly traded in the securities markets. If the SPAC is successful in raising money and the acquisition takes place, the target company takes the SPAC’s place on a stock exchange, in […]

The Supreme Court as a Source of Systemic Risk

Self-regulatory organizations (SROs) play an enormous role in financial markets. The Financial Industry Regulatory Authority (FINRA) oversees the brokerage industry, while the National Futures Association (NFA) covers the futures markets. Securities clearing firms, derivatives clearinghouses, the Municipal Securities Rulemaking Board (MSRB), and exchanges, such as the New York Stock Exchange (NYSE), are all SROs. Modern […]

Regulation of Governance & Risk Management: The Intersection of Banking & Technology

Banking institutions in the United States and other markets increasingly rely on sophisticated technology to manage customer relations, monitor regulatory compliance, and execute core business functions such as lending. These kinds of technologies, in turn, necessitate corporate governance and risk management arrangements that address the associated risks and vulnerabilities. In our report, Regulation of Governance & […]

What to Expect When Central Bank Digital Currencies Cross Borders—the Spillover Effects and Corresponding Policy Responses

Central bank digital currencies (CBDCs) impact a sovereign state’s monetary policy and financial markets, and necessitate a rethink of the roles of modern states and central banks. The current literature around CBDCs focuses on two dimensions: (1) the impact of CBDC on monetary and macroprudential policies, and (2) the institutional infrastructure, legal mandates, and technical design […]

Political Influence and Regulatory Enforcement

In April of 2010, a coal dust explosion at an underground coal mine in West Virginia killed 29 miners, constituting the worst mining disaster in the U.S. since 1970. An independent, state-led investigation of the accident concluded that regulatory capture was one cause of the tragedy. Political clout that the mine owner, Massey Energy, gained […]

While Congress Is Asleep: The Future of U.S. Financial Crisis Rescues

On August 2, the Board of Governors of the IMF approved the creation of approximately $650 billion of Special Drawing Rights (SDRs)—the IMF-created reserve currency—to boost global liquidity and support the ongoing pandemic response in emerging markets. This was the largest increase the U.S. treasury secretary could approve without the issuance being subject to an approving vote in the U.S. […]