Bank Regulation: Will Regulators Catch Up with the Market?

Legislation on financial services modernization has taken on special urgency since the banking industry is transforming itself through mergers stretching across financial services and across countries. Phil Gramm (R-Tex.), the new chairman of the Senate Banking Committee, has made bank regulatory reform his "number-one priority." A review of historical and contemporary evidence shows how market forces can address concerns about consumer protection and the soundness of the financial system. The financial services modernization legislation thus should repeal the 1933 Glass-Steagall Act and reform the 1956 Bank Holding Company Act,allow banks to structure their new activities through operating subsidiaries or affiliates,reduce the "moral hazard" of federal deposit insurance by mimicking private bond covenants, andnot raise any new regulatory barriers

CP-Violation in Kaluza-Klein and Randall-Sundrum Theories

The Kaluza-Klein theory and Randall-Sundrum theory are examined comparatively, with focus on the five dimensional (Dirac) fermion and the dimensional reduction to four dimensions. They are treated in the Cartan formalism. The chiral property, localization, anomaly phenomena are examined. The electric and magnetic dipole moment terms naturally appear. The order estimation of the couplings is done. This is a possible origin of the CP-violation.Comment: 3 pages, 2 figures, Proceedings of the Fifth KEK Topical Conference -Frontiers in Flavor Physics

The economics and politics of financial modernization

Financial services industry ; Bank supervision ; Industrial policy

Central counterparty clearing: history, innovation, and regulation

Banks and banking, Central ; Derivative securities

The Effects of Subdivision Design on Housing Values: The Case of Alleyways

Subdivision design likely impacts residential housing values. This study examines the sale prices of houses located in subdivisions utilizing rear-entry alleyways in the Greater Dallas-Fort Worth-Denton metroplex. Regression analysis on a sample of 1,672 home sales, some of which are located on alleyways, reveals statistically significant impacts. Consequently, developers, appraisers, New Urbanists and other real estate participants should consider subdivision design when estimating value for residential dwellings.

Mapping the American Shareholder Litigation Experience: A Survey of Empirical Studies of the Enforcement of the U.S. Securities Law

In this paper, we provide an overview of the most significant empirical research that has been conducted in recent years on the public and private enforcement of the federal securities laws. The existing studies of the U.S. enforcement system provide a rich tapestry for assessing the value of enforcement, both private and public, as well as market penalties for fraudulent financial reporting practices. The relevance of the U.S. experience is made broader by the introduction through the PSLRA in late 1995 of new procedures for the conduct of private suits and the numerous efforts to evaluate the effects of those provisions. We believe that the evidence reviewed here shows that the PSLRA\u27s provisions have largely achieved their intended purposes. For example, many more private suits are headed by an institutional lead plaintiff, such plaintiffs appear to fulfill the desired role of monitoring the suit\u27s prosecution and their presence is associated with suits yielding better settlements and lower attorneys\u27 fees awards. SEC enforcement efforts, while significant, have tended to focus on weaker targets, suggesting that the big fish get away. Equally importantly, markets impose their own discipline on companies whose managers release false financial reports and, in turn, firms discipline the managers who are responsible for false misleading reporting, perhaps because of the presence of, or potential for, private enforcement actions

Public and Private Enforcement of the Securities Laws: Have Things Changed Since Enron?

In this paper, we examine how those corporations that have been the targets of SEC enforcement efforts compare in terms of their size and financial health vis-a-vis firms that are targeted only by the private securities class action. We also ask whether the SEC or the private bar systematically proceeds against violators that cause the greatest loss to investors. In this regard, we are intrigued by the most basic question posed by private suits, whether settlements bear any relationship to the losses suffered by the class and whether those losses bear any relationship to the size of either the firm itself or the duration of the class action. Our data set consists of 389 securities class action settlements that occurred between 1990 and 2003. Using multivariate regression analysis to examine the determinants of government litigation, we find a sharp change in the pattern of SEC enforcement actions after the end of 2001. We find that the SEC seems to have shifted its enforcement focus away from targeting frauds at firms in financial distress to seeking out frauds at companies where investors may have suffered larger losses, especially if they are smaller firms. Again applying multivariate regression analysis, we look at settlement sizes in private class actions. We find that provable losses, total assets, class period and the presence of an SEC enforcement action, are all positively and significantly related to the dollar amount of the settlement obtained in a private action. These effects do not change over the time period of our sample. The fact that provable losses are such an important determinant of the size of actual recoveries supports the view that the merits do matter

Relaxing to Three Dimensions

We propose a new selection principle for distinguishing among possible vacua that we call the "relaxation principle". The idea is that the universe will naturally select among possible vacua through its cosmological evolution, and the configuration with the biggest filling fraction is the likeliest. We apply this idea to the question of the number of dimensions of space. We show that under conventional (but higher-dimensional) FRW evolution, a universe filled with equal numbers of branes and antibranes will naturally come to be dominated by 3-branes and 7-branes. We show why this might help explain the number of dimensions that are experienced in our visible universe.Comment: 4 pages; minor improvements, references adde

Logarithmic Correction to Newton Potential in Randall-Sundrum Scenario

Using a fixed-energy amplitude in Randall-Sundrum single brane scenario, we compute the Newton potential on the brane. It is shown that the correction terms to the Newton potential involve a logarithmic factor. Especially, when the distance between two point masses are very small compared to $AdS$ radius, the contribution of KK spectrum becomes dominant compared to the usual inversely square law. This fact may be used to prove the existence of an extra dimension experimentally.Comment: 7 pages, 1 figur