Leverhulme Lecture: Regulating Complexity in Financial Markets

Lecture given November 9, 2010, the second of three delivered by Prof. Schwarcz as Leverhulme Visiting Professor of Law, Oxford University. Complexity is the greatest challenge to 21st Century financial regulation, having the potential to impair markets and investments in several interrelated ways. Furthermore, complexity can cause failures that individual market participants cannot, or will not have incentive to, remedy. These failures are driven by information uncertainty, misalignment of interests and incentives among market participants, and nonlinear feedback and tight coupling that result in sudden unexpected market changes. These are the same types of failures that engineers have long faced when working with complex engineering systems. The lecture uses engineering solutions such as chaos theory to examine how financial regulation should be structured to correct those failures

Leverhulme Lecture: Regulating Complexity in Financial Markets

Lecture given November 9, 2010, the second of three delivered by Prof. Schwarcz as Leverhulme Visiting Professor of Law, Oxford University. Complexity is the greatest challenge to 21st Century financial regulation, having the potential to impair markets and investments in several interrelated ways. Furthermore, complexity can cause failures that individual market participants cannot, or will not have incentive to, remedy. These failures are driven by information uncertainty, misalignment of interests and incentives among market participants, and nonlinear feedback and tight coupling that result in sudden unexpected market changes. These are the same types of failures that engineers have long faced when working with complex engineering systems. The lecture uses engineering solutions such as chaos theory to examine how financial regulation should be structured to correct those failures

A BEHAVIORAL APPROACH TO THE GLOBAL FINANCIAL CRISIS

The purpose of this paper is to reflect the behavioral biases that led to this global financial crisis. The paper presents briefly the real causes of the crisis (structural and cyclical factors) and puts a greater accent on the behavioral factors. The authors considered to structure the paper in three main pillars: behavioral factors, the collapse of ethical behavior and the role of behavioral finance in studying, regulating and assessment financial risks. The first pillar consists in a brief presentation of the behavioral factors such as: optimism and wishful thinking, overconfidence, greed, regret, pessimism, passing the responsibility, herding - groupthink, anchoring, representativeness biases, informational cascades and "this time is different" syndrome. The second pillar of the paper presents the collapse of ethical behavior that led to the global financial crisis: predatory lending practices, inappropriate compensation schemes, rating agencies behavior, corporate governance reforms and financial institutions opacity in their reporting. The third pillar presents the mismanagement of risk and regulations that led us into this global mess. The paper concludes with the need of integrating biases of human behavior into regulations in order to make them more effective and people become less financially vulnerable.behavioral finance, irrationality, regulation, crisis

Economic Agendas in Civil Wars: What We Know, What We Need to Know

civil war, conflict prevention, human security

Regulating Disruption: Blockchain, GDPR, and Questions of Data Sovereignty

The article discusses the nature of law in cyberspace. Topics discussed include distinction between regulation as infringement of private autonomy and regulation as a collaborative enterprise; blockchain regulatory conundrum; and neoliberal market-complementing regulation. Also being discussed is the regulation for economic efficiency and consumer choice

Did somebody say Neoliberalism? On the uses and limitations of a critical concept in media and communication studies

This paper explores the political-economic basis and ideological effects of talk about neoliberalism with respect to media and communication studies. In response to the supposed ascendancy of the neoliberal order since the 1980s, many media and communication scholars have redirected their critical attentions from capitalism to neoliberalism. This paper tries to clarify the significance of the relatively new emphasis on neoliberalism in the discourse of media and communication studies, with particular reference to the 2011 phone hacking scandal at The News of the World. Questioning whether the discursive substitution of ‘neoliberalism’ for ‘capitalism’ offers any advances in critical purchase or explanatory power to critics of capitalist society and its media, the paper proposes that critics substitute a Marxist class analysis in place of the neoliberalism-versus-democracy framework that currently dominates in the field