Showing 9 of 534 Publications in Financial Regulation & Corporate Governance

David Teece on Diversity in Corporate Governance

Presentations & Interviews ICLE Academic Affiliate David Teece was a guest on the Insights from the Top podcast to discuss the importance of gender and racial diversity in . . .

ICLE Academic Affiliate David Teece was a guest on the Insights from the Top podcast to discuss the importance of gender and racial diversity in corporate governance, the state of securitization in emerging markets, what ownership means for rising attorneys, and how the firm has remained strong for more than a century. The full episode is embedded below.

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Financial Regulation & Corporate Governance

The Law & Economics of the Capital One-Discover Merger

TOTM Capital One Financial announced plans late last month to acquire Discover Financial Services in a $35.3 billion deal that would give Capital One its own credit-card payment . . .

Capital One Financial announced plans late last month to acquire Discover Financial Services in a $35.3 billion deal that would give Capital One its own credit-card payment network, while simultaneously allowing the company to expand its deposit base, credit-card offerings, and rewards programs.

Read the full piece here.

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Antitrust & Consumer Protection

The CFPB’s Misleading Slant on Competition in Credit-Card Markets

TOTM In yet another example of interagency cheerleading from the Federal Trade Commission (FTC), Chair Lina Khan recently touted the work of the Consumer Financial Protection . . .

In yet another example of interagency cheerleading from the Federal Trade Commission (FTC), Chair Lina Khan recently touted the work of the Consumer Financial Protection Bureau (CFPB) on payments networks:

https://twitter.com/linakhanFTC/status/1759962157133726060?s=20

Read the full piece here.

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Financial Regulation & Corporate Governance

Bitcoin: What Does Mainstream Economics Have to Say?

Scholarship Abstract As it relates to Bitcoin, there are several interesting questions to address: (1) Why does money exist and what role does it play in . . .

Abstract

As it relates to Bitcoin, there are several interesting questions to address:

(1) Why does money exist and what role does it play in society? How does bitcoin fit within our understanding of the role of money in society?
(2) What is bitcoin worth?
(3) Is bitcoin (or can bitcoin be) a sound form of money?
(4) Should states or governments be involved? Should they buy bitcoin?

In this paper, I attempt to provide some answers to these questions by drawing on insights from mainstream economic theory.

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Financial Regulation & Corporate Governance

Entrepreneurial Experimentation Under Knightian Uncertainty: A Process Model

Scholarship Abstract Enrolling financiers is critical to new venture success. Building on the challenges of communicating novel and complex projects under Knightian uncertainty, we describe two . . .

Abstract

Enrolling financiers is critical to new venture success. Building on the challenges of communicating novel and complex projects under Knightian uncertainty, we describe two approaches—the opportunity discovery path vis-à-vis the effectuation/bricolage path—entrepreneurs and financiers can use to resolve alternative sources of uncertainty sequentially rather than simultaneously.

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Financial Regulation & Corporate Governance

Regulating Producers by Randomizing Consumers

Scholarship Abstract Consumer law aims to empower consumers with accurate information and to protect them from misinformation. For complex goods and services, however, mandated disclosure laws . . .

Abstract

Consumer law aims to empower consumers with accurate information and to protect them from misinformation. For complex goods and services, however, mandated disclosure laws and other consumer law tools have had only limited success in helping consumers project their satisfaction and costs. Market responses, such as ratings, have limitations that have prevented them from compensating adequately for consumer law’s shortcomings. This Article describes how regulators could improve measurements of quality and cost by borrowing a tool from drug law: randomization. In designated markets, consumers who accept an incentive to volunteer would be randomized among two or more choices, and the government would collect short- and long-term information about each consumer’s experience. For example, in the health insurance market, by providing discounts to consumers who select two or more possible insurers, the government could accomplish the goal of comparing insurers’ health outcomes, free from the current confounding concern that different health insurers serve different pools of insureds. Randomization similarly could help overcome informational problems and abusive conduct in highly regulated markets for health providers, educational institutions, and lawyers, as well as for more ordinary goods and services, such as automobile repair. The information generated through randomization not only could be of direct use to consumers, but also could serve as an input into additional regulation, allowing the government to make more informed decisions about mandating product features where data establishes that producers exploit systematic errors by consumers.

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Financial Regulation & Corporate Governance

The Case for Nominal GDP Level Targeting

Scholarship Abstract In this paper, I make the case for a nominal GDP level target in the U.S. I begin by arguing that the Federal Reserve’s . . .

Abstract

In this paper, I make the case for a nominal GDP level target in the U.S. I begin by arguing that the Federal Reserve’s current flexible average inflation targeting regime is deficient. I then argue that since a competitive monetary equilibrium is optimal, monetary policy should seek to replicate the competitive monetary model. Doing so resembles nominal GDP targeting. Finally, I offer the following practical reasons why policymakers might prefer a nominal GDP target. Nominal GDP targeting (a) does not require policymakers to determine whether current economic fluctuations are demand-driven or supply-driven nor does it require real-time estimates of the output gap, (b) automatically prevents the central bank from exacerbating supply shocks, and (c) leads to greater financial stability.

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Financial Regulation & Corporate Governance

Looking Forward by Looking Backward: The Future of Consumer Finance and Financial Protection

Scholarship Abstract This essay was prepared for “The Future of Financial Regulation Symposium” October 6, 2023, sponsored by the C. Boyden Gray Center. I assess the . . .

Abstract

This essay was prepared for “The Future of Financial Regulation Symposium” October 6, 2023, sponsored by the C. Boyden Gray Center. I assess the future of consumer finance and financial protection by looking to the lessons of history. Consumer finance and financial protection in the United States exhibits a spontaneous evolution driven by changes in technology and consumer preferences in a repeated cycle. In general, consumers use consumer finance in a manner consistent with the predictions of rational behavior in order to improve their lives. Consistently, this goal of consumer betterment runs up against paternalistic and repressive laws, which attempt to prevent the beneficial evolution of technology and competition. Eventually economic forces overwhelm regulatory repression for the betterment of consumers.

I track three distinct eras in the evolution of consumer finance and financial regulation that provide a roadmap to the future evolution in the virtual era and emergent threats to consumers from private and public sources, including the growing use of the consumer finance system to infringe on the exercise of constitutionally-protected values.

Read at SSRN.

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Financial Regulation & Corporate Governance

California’s Negligence Tort Empowers Juries, Hurts Innovation

Popular Media A California state appellate court on Jan. 9 affirmed in Gilead Life Sciences, Inc. v. Superior Court of San Francisco the creation of a novel corporate tort, holding a . . .

A California state appellate court on Jan. 9 affirmed in Gilead Life Sciences, Inc. v. Superior Court of San Francisco the creation of a novel corporate tort, holding a firm liable for negligence for failing to develop and market a product superior to the firm’s current product on the market.

Read the full piece here.

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Financial Regulation & Corporate Governance