Into the Void: Governing Finance in Central and Eastern Europe

Twenty years after the fall of the iron curtain-which for decades had separated East from West-most countries of Central and Eastern Europe are now members of the European Union; some have even adopted the euro. Nonetheless, these countries have alsofinancial regulation, global finance, home-host country regulation

LAW ENFORCEMENT UNDER INCOMPLETE LAW: Theory and Evidence from Financial Market Regulation

This paper studies the design of law-making and law enforcement institutions based on the premise that law is inherently incomplete. Under incomplete law, law enforcement by courts may suffer from deterrence failure, defined as the socialwelfare loss that results from the regime's inability to deter harmful actions. As a potential remedy a regulatory regime is introduced. The major functional difference between courts and regulators is that courts enforce law reactively, that is only once others have initiated law enforcement procedures, while regulators enforce law proactively, i.e. on their own initiative. Proactive law enforcement may be superior in preventing harm. However, it incurs high costs and may err in stopping potentially beneficial activities. We study optimal regime selection between a court and a regulatory regime and present evidence from the history of financial market regulationIncomplete law, law enforcement, financial market, regulation

Programmed instruction in outlining

Thesis (Ed.M.)--Boston UniversityThe purpose ot this study is to determine whether the skill ot outlining could be taught successfully at the fifth grade level by means of programmed instruction

Implementation and Evaluation of Novel Buildstyles in Fused Deposition Modeling (FDM)

Previous investigations have shown that the optimization of extrusion dynamics in .conjunction with the buildstyle pattern is of paramount importance to increase part quality in Fused Deposition Modeling (FDM). Recently domain decomposition and space filling curves have been introduced for slice generation in FDM [1]. The current work focuses on the implementations of fractal-like buildstyle .patterns using. Simulated Annealing [2, 3], Lin-Kernighan algorithms [4] and Construction Procedures based on Nearest Neighbor Heuristics [5]. These computational optimization procedures are able to generate filling patterns that allow the continuous deposition of a single road to fill arbitrary shaped domains. The necessary software modules to produce arbitrary threedimensional artifacts have been developed and are evaluated with respect to part quality and build time.Mechanical Engineerin

Global Network Finance: Organizational Hedging in Times of Uncertainty

The global financial crisis that began in 2007 revealed a fundamental weakness in the global financial system: Extensive financial interdependence of financial relations unmatched by a governance regime of similar reach. As multinational banks sought to fortify their capital base in the wake of the unfolding crisis, Sovereign wealth Funds (SWFs) and the banks’ home governments have become mutual stakeholders in some of the largest financial intermediaries with global reach. From the multitude of individual transactions has emerged a network of equity ties that spans the globe. These ties bridge institutional practices and governance regimes that previously operated largely independently of each other. They have the potential of fostering the emergence of a new governance regime for the global financial market place that deviates from earlier prognoses that globalization entails convergence on a single governance model. Instead, the newly created ties that jointly add up to a global financial network enable institutionally and organizationally diverse players to contribute their own perspectives as joint stakeholders in selected financial intermediaries, and indirectly, in the global financial system. This is likely to have important implications for the behavior of these actors in the future and the emergence of new governance solutions for the global market place. The paper discusses two recent cases of collaborative re-capitalization events to illustrate how this regime is evolving in practice

On the Theoretical Foundations for Regulating Financial Markets

How we think about financial markets determines how we regulate them. Since the 1970s modern finance theory has shaped how we think about and regulate financial markets. It is based on the notion that markets are or can be made (more) efficient. Financial markets have been deregulated when they were thought to achieve efficient outcomes on their own; and regulation was designed to lend crutches to them when it appeared that they needed support. While modern finance theory has suffered some setbacks in the aftermath of the global crisis, defenders hold that improving market efficiency should still be the overriding concern for regulation. This essay raises the question whether this is indeed the case. What if other factors besides information costs affect the vulnerability of markets to crises? Two factors have been identified in the literature: Imperfect Knowledge and the Liquidity Constraint. This essay introduces the relevant theories that focus on these factors and discusses their regulatory implications

How Law Affects Lending

A voluminous literature seeks to explore the relation between law and finance, but offers little insights into dynamic relation between legal change and behavioral outcomes or about the distributive effects of law on different market participants. The current paper disentangles the law-finance relation by using disaggregate data on banks’ lending patterns in 12 transition countries over a 8 year period. This allows us to control for country level heterogeneity and differentiate between different types of lenders. Employing a differences-in-differences methodology in an exclusive ”laboratory” setting as well as unique hand collected datasets on legal change as well as changes in bank ownership, we find that lending volume responds positively to legal change. However, not all legal change is equally effective. The introduction of a legal regime that enhances each lender’s individual prospects of enforcing her claims (collateral law) results in greater increases in lending volume than changes in bankruptcy law, the essence of which is to provide an orderly liquidation or reorganization process in the presence of multiple creditors. Finally, we find that banks that newly enter the market respond more strongly to legal change than do incumbents. In particular, foreign-owned banks extend their lending volume substantially more than domestic banks.creditor rights; credit market development; bankruptcy; collateral law; bank lending

Economic Development, Legality, and the Transplant Effect

We analyze the determinants of effective legal institutions (legality) using data from 49 countries. We show that the way the law was initially transplanted and received is a more important determinant than the supply of law from a particular legal family. Countries that have developed legal orders internally, adapted the transplanted law, and/or had a population that was already familiar with basic principles of the transplanted law have more effective legality than countries that received foreign law without any similar pre-dispositions. The transplanting process has a strong indirect effect on economic development via its impact on legality.http://deepblue.lib.umich.edu/bitstream/2027.42/39692/3/wp308.pd

Law and Finance in Transition Economies

This paper offers the first comprehensive analysis of legal change in the protection of shareholder and creditor rights in transition economies and its impact on the propensity of firms to raise external finance. Following La Porta et al. (1998), the paper constructs an expanded set of legal indices to capture a range of potential conflicts between different stakeholders of the firm. It supplements the analysis of the law on the books with an analysis of the effectiveness of legal institutions. Our main finding is that the effectiveness of legal institutions has a much stronger impact on external finance than does the law on the books, despite legal change that has substantially improved shareholder and creditor rights. This finding supports the proposition that legal transplants and extensive legal reforms are not sufficient for the evolution of effective legal and market institutions.shareholder and creditor rights, legal effectiveness, external finance, transition

Towards a Legal Theory of Finance

This paper develops the building blocks for a legal theory of finance. LTF holds that financial markets are legally constructed and as such occupy an essentially hybrid place between state and market, public and private. At the same time, financial markets exhibit dynamics that frequently put them in direct tension with commitments enshrined in law or contracts. This is the case especially in times of financial crises when the full enforcement of legal commitments would result in the self-destruction of the financial system. This law-finance paradox tends to be resolved by suspending the full force of law where the survival of the system is at stake; that is, at its core. Here, power becomes salient. This helps explain why finance is concentrated around ultimate lenders of last resort and why regulating finance\u27s core has become so elusive. It also holds lessons for future reforms