Plays in Performance

Plays in Performanc

Mirror - Vol. 10, No. 17 - November 20, 1986

The Mirror (sometimes called the Fairfield Mirror) is the official student newspaper of Fairfield University, and is published weekly during the academic year (September - May). It runs from 1977 - the present; current issues are available online.https://digitalcommons.fairfield.edu/archives-mirror/1219/thumbnail.jp

Legislation and Legitimation: Congress and Insider Trading in the 1980s

Orthodox corporate law and economics holds that American corporate and securities regulation has evolved inexorably toward economic efficiency. That position is difficult to square with the fact that regulation is the product of government actors and institutions. Indeed, the rational behavior assumptions of law and economics suggest that those actors and institutions would tend to place their own self-interest ahead of economic efficiency. This Article provides anecdotal evidence of such self interest at work. Based on an analysis of legislative history-primarily congressional hearings-this Article argues that Congress had little interest in the economic policy effect of insider trading legislation in the 1980s. Rather, those laws were motivated primarily by a desire to legitimate the existing political and economic order. The policy and doctrinal grounds for prohibiting insider trading are unclear. Yet Congress devoted a great amount of attention to increasing the penalties for insider trading in the 1980s. Meanwhile, more serious economic issues went unaddressed What explains this odd focus? Congress routinely explains corporate and securities legislation as motivated by a need to bolster investor confidence and protect the capital formation process. In the 1980s, legislators argued that insider trading scandals were undermining investor confidence. That argument is unconvincing, however, because those scandals were contemporaneous with unprecedented stock prices. An alternative explanation for the 1980s legislation is that Congress sought political legitimacy: not investor confidence\u27 in the markets, but voter confidence in the political-economic system. Our government has a symbiotic relationship with a capitalist system under which the power of business and finance sometimes rivals that of the state. This arrangement is acceptable to most voters during prosperous times but can undermine the legitimacy of the political-economic system in times of perceived economic crisis. Government crafts its responses to such crises to protect its legitimacy. The process of self-legitimation does not consist merely of responding to exogenous preferences of constituents. It also includes attempts to mold constituents\u27 preferences to be more consistent with the self-interest and problem-solving abilities of Congress

The Accounting Network: how financial institutions react to systemic crisis

The role of Network Theory in the study of the financial crisis has been widely spotted in the latest years. It has been shown how the network topology and the dynamics running on top of it can trigger the outbreak of large systemic crisis. Following this methodological perspective we introduce here the Accounting Network, i.e. the network we can extract through vector similarities techniques from companies' financial statements. We build the Accounting Network on a large database of worldwide banks in the period 2001-2013, covering the onset of the global financial crisis of mid-2007. After a careful data cleaning, we apply a quality check in the construction of the network, introducing a parameter (the Quality Ratio) capable of trading off the size of the sample (coverage) and the representativeness of the financial statements (accuracy). We compute several basic network statistics and check, with the Louvain community detection algorithm, for emerging communities of banks. Remarkably enough sensible regional aggregations show up with the Japanese and the US clusters dominating the community structure, although the presence of a geographically mixed community points to a gradual convergence of banks into similar supranational practices. Finally, a Principal Component Analysis procedure reveals the main economic components that influence communities' heterogeneity. Even using the most basic vector similarity hypotheses on the composition of the financial statements, the signature of the financial crisis clearly arises across the years around 2008. We finally discuss how the Accounting Networks can be improved to reflect the best practices in the financial statement analysis

Effective Governance of Global Financial Markets:An Evolutionary Plan for Reform

Runaway electrons, which are generated in a plasma where the induced electric field exceeds a certain critical value, can reach very high energies in the MeV range. For such energetic electrons, radiative losses will contribute significantly to the momentum space dynamics. Under certain conditions, due to radiative momentum losses, a non-monotonic feature - a ‘bump' - can form in the runaway electron tail, creating a potential for bump-on-tail-type instabilities to arise. Here, we study the conditions for the existence of the bump. We derive an analytical threshold condition for bump appearance and give an approximate expression for the minimum energy at which the bump can appear. Numerical calculations are performed to support the analytical derivation