Balancing the banks Dewatripont, Mathias; Rochet, Jean-Charles; Tirole, Jean ...
2010., 20100419, 2010, 2010-04-19, 20100101
eBook
The financial crisis that began in 2007 in the United States swept the world, producing substantial bank failures and forcing unprecedented state aid for the crippled global financial system. ...Bringing together three leading financial economists to provide an international perspective, Balancing the Banks draws critical lessons from the causes of the crisis and proposes important regulatory reforms, including sound guidelines for the ways in which distressed banks might be dealt with in the future.
This volume assembles and presents a database on bank regulation in over 150 countries (included also on CD). It offered the first comprehensive cross-country assessment of the impact of bank ...regulation on the operation of banks, and assesses the validity of the Basel Committee's influential approach to bank regulation. The treatment also provides an empirical evaluation of the historic debate about the proper role of government in the economy by studying bank regulation and analyzes the role of politics in determining regulatory approaches to banking. The data also indicate that restrictions on the entry of banks, government ownership of banks, and restrictions on bank activities hurt banking system performance. The authors find that domestic political factors shape both regulations and their effectiveness.
Focusing on the creation and misuse of government documents in Vietnam since the 1920s, The Government of Mistrust reveals how profoundly the dynamics of bureaucracy have affected Vietnamese efforts ...to build a socialist society. In examining the flurries of paperwork and directives that moved back and forth between high- and low-level officials, Ken MacLean underscores a paradox: in trying to gather accurate information about the realities of life in rural areas, and thus better govern from Hanoi, the Vietnamese central government employed strategies that actually made the state increasingly illegible to itself.             MacLean exposes a falsified world existing largely on paper. As high-level officials attempted to execute centralized planning via decrees, procedures, questionnaires, and audits, low-level officials and peasants used their own strategies to solve local problems. To obtain hoped-for aid from the central government, locals overstated their needs and underreported the resources they actually possessed. Higher-ups attempted to re-establish centralized control and legibility by creating yet more bureaucratic procedures. Amidst the resulting mistrust and ambiguity, many low-level officials were able to engage in strategic action and tactical maneuvering that have shaped socialism in Vietnam in surprising ways.
In July 2007, the then chief executive of Citigroup, Charles Prince, captured the hubris of a market dangerously addicted to debt: “When the music stops, in terms of liquidity, things will be ...complicated. But as long as music is playing, you have got to get up and dance. We're still dancing.” By the end of the year, Mr Prince was forced to resign along with some of the most influential bankers on Wall Street. Global investment houses in the United States and Europe were forced to turn to sovereign wealth funds for emergency funding. Their rescue comes at a significant material and reputational price.
Asset managers as regulators Dorothy S Lund
University of Pennsylvania law review,
01/2023, Volume:
171, Issue:
1
Journal Article
Peer reviewed
The conventional view of regulation is that it exists to constrain corporate activity that harms the public. But amid perceptions of government failure, many now call on corporations to tackle social ...problems themselves. And in this moment of dissatisfaction with government, powerful asset managers have stepped in to serve as regulators of last resort, adopting rules that bind corporate America on issues of great social importance, including climate change and workplace diversity. This article describes this dynamic - where shareholders have become regulators - which has been made possible by the rise of institutional shareholding (and index investing in particular) and the contemporaneous growth of shareholder power. As a result, the large diversified asset managers that specialize in index funds (the so-called "Big Three" - Vanguard, State Street, and BlackRock) collectively hold nearly controlling stakes across the public equity market. In addition to intervening in traditional areas of corporate governance, they have adopted sweeping board diversity mandates as well as "ESG" disclosure and carbon emission reduction requirements, and enforced them through their proxy voting policies. And the early consensus is that asset managers have been influential in these areas, driving change where other private (and public) efforts failed. This article describes these regulatory interventions in detail and concludes that we are witnessing a novel privatization dynamic. It also offers a theory about the incentives that shape it. Asset managers will only supply regulation if it has a positive impact on their profits; therefore, demand from clients - which include not just individuals, but also institutions - will govern the choice of policies and the substance of their rules. And given the breadth of the Big Three's clientele and their interest in avoiding government backlash, their policies are likely to take many interests into account. Nonetheless, serious concerns loom large, including the fact that for-profit asset managers lack democratic accountability and government oversight for their policymaking, with no guarantee that it will further the public interest. To the extent that their policies are shaped by the corporate clients that provide much of the assets they manage, they are unlikely to be as impactful as many perceive. The provision of regulation by asset managers may also take pressure off the government to respond to these issues with policies better calibrated toward advancing social welfare. At bottom, understanding the forces that shape (and potential problems that accompany) this privatization dynamic is of critical importance not just for investors and corporations, but also for the public.
This article sets out to pinpoint the locus of control over the police. Running the police force is one of the most important tasks assigned to local governments in America. Yet heretofore policing ...has not been analyzed through the lens of local government law. Through a review of state statutes, this article reveals that the reigning notion that the police are local oversimplifies a complex legal reality. Local governments are mostly empowered to choose to establish (or not establish) a police force and to define the force's size and role. However, they are mostly not afforded concomitant full powers over the police workforce. Issues pertaining to officers' employment status-hiring, service terms, and, most significantly, removal-are heavily regulated through state mandates. Because these mandates are almost always geared toward aggressively protecting officers' rights, local governments are left largely bereft of means to discipline officers who misbehave. This division of powers - whereby the local government mostly controls the objectives and functions of a public service but does not enjoy similar levels of control over the workforce providing the service - is unique to policing. Powers over other important local functions do not follow this pattern. Moreover, local government law theories cannot justify this division of powers that withholds from the local government most powers over officers' employment patterns. A principled analysis indicates that local control of the police workforce would in many instances contribute to economic efficiency and to democratic participation, the two values normally associated with local governance. The article thus concludes by suggesting multiple doctrinal reforms that could begin to realign powers over the police force. Such reforms are of particular importance today as our system continues to grapple with the challenge of widespread police violence.
Does globalization erode the nation state's capacity to act? Are nation states forced to change their policies even if this goes against the democratic will of their electorates? How does government ...action change under conditions of globalization? Questions like these have not only featured highly in political debates in recent years, but also in academic discourse. This book seeks to contribute to that debate. The general question it addresses is whether globalization leads to policy convergence a central, but contested topic in the debate, as theoretical arguments can be advanced both in favour of and against the likelihood of such a development. More specifically, the book contains detailed empirical case studies of four countries (the United States, the United Kingdom, Germany, and Switzerland) in a policy area where state action has been particularly challenged by the emergence of world-wide, around-the-clock financial markets in the last few decades, namely that of the regulation and supervision of the banking industry. Based on careful analysis of historical developments, specific challenges, the character of policy networks and institutions, and their interaction in the political process, this book argues that nation states still possess considerable room for manouevre in pursuing their policies. Even if they choose supranational coordination and cooperation, their national institutional configurations still function as filters in the globalization process. This book is of particular value to readers interested in the politics and policies of globalization, the interaction of business communities and the political system in different countries, and students of comparative politics interested in detailed case studies of policy-making. Available in OSO:
Governing the Energy Challengeis a comparative study between Canada and Germany that features essays by leading energy and public policy specialists from both countries.
A new crop of private enforcement suits is sprouting up across the country. These laws permit people to bring enforcement actions against those who aid or induce abortions, against schools that ...permit transgender students to use bathrooms consistent with their gender identities, and against schools that permit transgender students to play on sports teams consistent with their gender identities. Similar laws permit people to bring enforcement actions against schools that teach critical race theory and against those who sell restricted firearms. State legislatures are considering a host of laws modeled on these examples, along with other novel regimes. These are new adaptations of private enforcement regimes—laws that task members of the public with enforcing regulatory statutes in court. Private enforcement has a somewhat long lineage in U.S. law, dating back to at least the nineteenth century. Since then, in contexts as diverse as employment discrimination, housing discrimination, antitrust, securities, and other contexts, the U.S. legal system has endowed members of the public with the power to enforce regulatory law in court. While these traditional forms of private enforcement have been relatively stable and survived legal challenges, the new adaptations cropping up have prompted challenges in court and intense debate. Among other things, scholars argue that they amount to a form of legal vigilantism, suppress existing legal rights, and pose due process concerns in their design. Yet, to fully distinguish between private enforcement’s traditional forms and these new variations, we need a richer account of the meaning and role of private enforcement in democracy.
This Article provides such an account, analyzing and distinguishing private enforcement regimes through the lens of a participatory democracy theory of regulatory governance. Drawing on debates and thinking at the dawn of the modern regulatory state, this Article argues that private enforcement is democratically valuable when it (1) evens out structural power disparities that can undermine democracy, (2) enables members of the public to bring the expertise of experience to dynamic regulatory environments, and (3) facilitates democratic deliberation. This Article argues that traditional private enforcement suits generally contribute to democratic governance under each rationale. In contrast, the new private enforcement suits perform less well, and indeed, often undermine the rationales for popular participation in regulatory governance. This Article thus articulates a richer theory of popular participation in regulatory governance that shows the promise of private enforcement generally and the perils of recent adaptations.
