Disclosure’s Failure in the Subprime Mortgage Crisis

This symposium article examines how disclosure, the regulatory focus of the federal securities laws, has failed to achieve transparency in the sub-prime mortgage crisis and what this failure means for modern financial securities markets

Rethinking a Corporation’s Obligations to Creditors

Sammanfattning Syftet med studien var att undersöka och analysera enskilda människors attityder och förhållningssätt till tiggeri och till de människor som tiggeri i Piteå stad. Tiggeriet i Piteå och norra Sverige har de senaste åren ökat och har ansetts som ett nytt socialt fenomen. Studien är kvalitativ med en induktiv ansats. Fyra personer intervjuades på ett semistrukturerat sätt, fyra teaman där tiggeri, tiggaren, mötet med tiggaren, att välja att ge eler inte samt förekomsten av tiggeriet var ledande i intervjuerna. Metoden som användes för att analysera och tolka intervjuerna är inspirerade av grundad teori, där kodning och kategorisering var centrala verktyg för att komma till slutsatser och hitta likheter och skillnader i intervjupersonernas berättelser. Intervjuerna visade på ett komplext och ambivalent möte mellan intervjupersonerna och tiggarna. Där intervjupersonerna ställdes inför en rad olika svåra överväganden, dels i hur de skulle bemöta tiggaren men också i frågan om att ge eller att inte ge. Tre av intervjupersonerna upplevde mötet med tiggaren som jobbigt och obekvämt. En bidragande faktor till de ambivalenta känslorna var intervjupersonernas osäkerhet kring tiggeriets bakgrund, det vill säga om kriminella ligor förekommer eller inte, detta påverkade intervjupersonernas syn på tiggeri men också i själva mötet med tiggaren

Derivatives and Collateral: Balancing Remedies and Systemic Risk

U.S. bankruptcy law grants special rights and immunities to creditors in derivatives transactions, including virtually unlimited enforcement rights. This Article examines whether exempting those transactions from bankruptcy’s automatic stay, including the stay of foreclosure actions against collateral, is necessary or appropriate in order to minimize systemic risk

Regulating Shadows: Financial Regulation and Responsibility Failure

In the modern financial architecture, financial services and products increasingly are provided outside of the traditional banking system—and thus without the need for bank intermediation between capital markets and the users of funds. Most corporate financing, for example, no longer is dependent on bank loans but raised through special-purpose entities, money-market mutual funds, securities lenders, hedge funds, and investment banks. This shift, referred to as “disintermediation” and described as creating a “shadow banking” system, is so radically transforming finance that regulatory scholars need to rethink their assumptions. Two of the fundamental market failures underlying shadow banking—information failure and agency failure—were also prevalent in the bank-intermediated financial system. By amplifying systemic risk, however, disintermediation greatly increases the importance of what scholars long have viewed as a third market-failure category: externalities. Viewing externalities as a distinct category of market failure is misleading, though: externalities are fundamentally consequences, not causes, of failures; and all market failures can result in externalities. Focusing on externalities also obscures who should be responsible for causing the externalities. This article argues that the third market-failure category should be reconceptualized as a “responsibility failure”: a firm’s ability to externalize a significant portion of the costs of taking a risky action. That not only would more precisely describe the market failure but also would help to illuminate that sometimes the government itself, not merely individual firms, should bear responsibility for causing externalities, and that exercising this responsibility may require the government to enact laws that require firms to internalize those costs

Facing the Debt Challenge of Countries That Are Too Big to Fail

The recent financial woes of Greece and other nations are reinvigorating the debate over whether to bail out defaulting countries or, instead, restructure their debt. Bailouts are expensive, in the case of Greece costing potentially hundreds of billions of euros. But a bailout was virtually inevitable because a default on Greek debt was believed to have the potential to bring down the world financial system. This is a growing problem: as finance becomes more intertwined, the potential for a countrys debt default to trigger a larger systemic collapse becomes even more tightly linked. This reveals a phenomenon viewed until recently as limited to banks and other large financial institutionsthe problem of too big to fail. Bailouts are not, however, the only way to prevent defaults. Just as policymakers have been proposing orderly resolution procedures for troubled financial institutions, an orderly resolution procedure for troubled countries can bypass the need for a bailout. This short and accessible paper, written as a chapter for the forthcoming book Sovereign Debt: From Safety to Default (Robert W. Kolb ed., 2010-11), explains how simple such a resolution procedure would be and why, without it, we will all end up subsidizing nations that lack the political will or ability to be fiscally responsible

Collapsing Corporate Structures: Resolving the Tension Between Form and Substance

Opus Alchemicum explores the fabrication of “reality” upon imagination, and the affective relation between ideas and matter in the built environment. Like an alchemic experiment, through the manipulation of real facts and their transformation into myth, stories, rituals and objects, the project tries to demonstrate how myths are not just produced but also produce “real” by creating a collective understanding and a pattern of relations, roles and ideas. This project’s attempt is to reveal the mechanisms of reality in an act of analogy. The role of architecture, buildings and objects is investigated in its transfigured correspondent. Myths are both constructed and revealed as the language code of a discourse. The result is a work of alchemy, a product of imagination as a path of understanding. The project starts with traveling to Romania as a study case, in a journey where encounters and empathy win over maps and scheduled visits. What I bring back with me is a series of situations, assemblages, a pattern of history, places, culture and affections belonging to the very present of Romania.These situations are plunged in another larger assemblage, the European one, with Sweden as a partaker. In this country’s desires and metamorphoses we can discover those myths that belong and affect our culture and our spaces.  Opus Alchemicum is a tale about myths, behavior and built environment. About Romania, or somewhere else. About ruins and gold. About invisible values and material affects. About a vanished land, about desire and nostalgia. About displacement, diaspora and costumes. About migration. About a journey and the gas station at the mid of the road. About metamorphoses, gypsy palaces and dowries. About matter, produced, traded and extinguished. About Prussian Blue and honey. About a tower, a fountain and a secret garden. About the alchemic process of making reality out of ideas. Opus Alchemicum utforskar fabricering av verklighet genom fantasi, den affektiva relationen mellan ide och materia i en bygg omgivning. Ett alkemiskt experiment, genom manipulation av verkliga fakta och deras transformation till myter, berättelser, ritualer och objekt, försöker detta projekt att påvisa hur myter inte bara är producerade utan hur de också producerar en ”verklighet” genom att skapa en kollektiv förståelse och ett mönster av relationer, roller och föreställningar. Projektet försöker att avslöja mekanismerna av verklighet i en handling av analogi. Rollen av arkitektur, byggnader och objekt undersöks i sin förvandlade korrespondens. Myter är både konstruerade och avslöjade genom språkkoden för en diskurs. Resultatet är ett verk av alkemi, en produkt av inbillningsförmåga längst en väg för förståelse. Projektet startar med en resa till Rumänien som studie fall, i en färd där möten och empati segrar över kartor och schemalagda möten. Det jag tog med mig tillbaka var en serie av situationer, samlingar och mönster av historien. Platser, kultur och känslor som representerar det nuvarande Rumänien. Situationer som störtar in till ett större sammanhang i form av det Europeiska med Sverige som deltagare. I detta lands önskningar och metamorfoser kan vi upptäcka de myter som tillhör och påverkar vår kultur och dess rum. Opus Alchemicum är en berättelse om myter, beteenden och byggd omgivning. Om Rumänien eller någon annanstans. Om ruiner och guld. Om osynliga värden och materiell inverkan. Om ett försvunnet land av begär och nostalgi. Om förskjutningar, förskingringar och kostymer. Om migration. Om färder och bensinstationen i mitten av resan. Om metamorfoser, romerska palats och hemgifter. Om materia, producerad, handlad och utsläckt. Om preussiskt blått och honung. Om ett torn en fontän och en hemlig trädgård. Om den alkemiska processen av att skapa verklighet genom idéer

Rethinking Freedom of Contract: A Bankruptcy Paradigm

This Article tests the limits of private contracting by examining what it means to contract about bankruptcy. Bankruptcy law if governed by a statutory code that defines the relationship between debtors and creditors when a debtor enters the bankruptcy regulatory scheme. May debtors and creditors contract in advance to change that relationship? Or would these contracts be Faustian bargains that the state should not enforce? Both courts and scholars are in conflict, yet the answer is critical because it affects not only bankruptcy costs but also the structuring of corporate reorganizations and securitization transactions. I maintain that the threshold question--what freedom should parties or should not be allowed to contractually alter statutory schemes. I then apply those principles to a model of prebankruptcy contracting by taking into account the policies underlying the bankruptcy code and also by analyzing the extent to which, under contract law, externalities should render a contract unenforceable. I conclude that, within defined limits, bankruptcy law should be viewed as default provisions and not as mandatory rules. Finally I show that my model of prebankruptcy contracting can have important applications, not only to making corporate reorganizations and securitizations transactions more efficient but also to understanding when parties should be allowed to contract about statutory schemes generally and when externalities should override freedom of contract