What do the proposed changes to the supervision of liquidity and funding risks in the UK mean?

By | December 11, 2019

Courtesy of Mete Feridun When it comes to changing UK liquidity regulations, each round of revisions – such as the liquidity coverage ratio, net stable funding ratio, and the cash-flow mismatch risk framework – typically makes funding and liquidity risk management more complex and costly for firms. However, the Prudential Regulation Authority’s (PRA) recent consultation paper… Read More »

Bankruptcy’s Adjunct Regulator

By | December 9, 2019

Courtesy of Alexandra Sickler and Kara Bruce Bankruptcy and consumer finance laws operate in independent silos. Many consumer advocates view bankruptcy as a remote and specialized field, while bankruptcy proponents tend to view bankruptcy as a complete and exhaustive system. Our forthcoming paper, Bankruptcy’s Adjunct Regulator (Florida Law Review), bridges these fields with a comprehensive… Read More »

Blockchain Disruption and Decentralized Finance: The Rise of Decentralized Business Models

By | December 6, 2019

Courtesy of Yan Chen and Cristiano Bellavitis Over the last few years, blockchain and its applications – such as Bitcoin – have gone through a cycle of high promise and setback. In September 2017, some commentators argued that blockchain was the most important invention since the internet and electricity. Then, a few months later, governments… Read More »

The Fed Must Reject Stealth Cut of Bank Capital Requirements

By | December 5, 2019

Courtesy of Gregg Gelzinis In a recent speech, Federal Reserve Vice Chair for Supervision Randal Quarles again publicly outlined his plan to engineer yet another decrease in the loss-absorbing capacity of the nation’s largest banks. The plan would re-design the countercyclical capital buffer (CCyB) and use misdirection to make it appear as though there would… Read More »

Spillover Effects in Securities Litigation

By | November 25, 2019

Courtesy of Dain Donelson, Rachel Flam, and Christopher Yust When a firm is sued, do its peers respond to the litigation by changing their own behavior? In our recent paper, we examine the spillover effect of securities litigation on industry peers. We focus on investor reactions and changes in peers’ disclosure and financial reporting. We… Read More »

Issuing a Central Bank Digital Currency: Possible Motives, Characteristics and Consequences

By | November 21, 2019

Courtesy of Christian Pfister* In 2018, the Bank for International Settlements conducted a survey to which 63 central banks responded. According to the results, 70% of the central banks were then (or planned to be soon) engaged in central bank digital currency (CBDC) work. However, only three central banks reported that they were likely to… Read More »

Inconsistent Implementation of the FRTB Could Jeopardize Post-Crisis Banking Reforms

By | November 20, 2019

Courtesy of Mete Feridun Disclaimer: The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official views and opinions of PwC. In response to the global financial crisis, the Basel Committee initiated an overhaul of the market risk capital rules to address shortcomings in the current… Read More »

The Impact of Financial Misconduct on Employee Satisfaction

By | November 18, 2019

Courtesy of Yuqing Zhou and Christos Makridis Our recent paper uses data from Glassdoor to investigate changes in employees’ perceptions of firms and managers during periods of financial misconduct and after the public announcement of misconduct. Employees’ perceptions are critical for a few reasons. First, employee satisfaction is important for firm productivity. Second, employee satisfaction… Read More »

The Effect of Stardom on the Informativeness of a CEO’s Insider Trades

By | November 13, 2019

Courtesy of Sanjiv Sabherwal and Mohammad Uddin There are many studies on insider trading by corporate CEOs. There are also some studies that examine whether celebrity, or star CEOs, create more value for their firms and investors. However, no studies, until now, have attempted to identify whether there is a difference in the information content… Read More »

Blockchain Finance: On the Prospect of Decentralized, Pseudonymous Financial Markets

By | November 12, 2019

Courtesy of Cameron Harwick and James Caton  The Bitcoin blockchain was launched in 2009, providing for the first time a secure, decentralized, and electronic platform for monetary exchange. It was not purely anonymous – public account information was available – but users did not have to know or trust each other in order to participate in “money”… Read More »