Back in 2014, the Hong Kong-based venture capital group Deep Knowledge Ventures announced that it had successfully appointed an algorithm named “VITAL” to its board of directors. This system of artificial intelligence (AI) was purportedly given the right to vote on whether the firm needed to invest in a specific company or not, similar to… Read More »
Over the past few decades, the ownership structure of American firms has undergone a significant transformation. Gone are the days of dispersed ownership, where most firms were owned by thousands of individuals directly investing their savings in the stock exchange. Instead, we now have a complex web of institutional investors and powerful individual or family… Read More »
Decentralized finance (‘DeFi’) through smart contract technology has been touted as a major use case for blockchain technology ever since the launch of the Ethereum blockchain. One area within DeFi that received particular interest from an early stage is secured lending. Yet, in both Commonwealth and UCC jurisdictions, doubts exist over how such assets function… Read More »
Poison pills are one of the most powerful ways of deterring hostile takeovers. Their goal is to make a hostile takeover so unattractive and expensive that the potential acquirer is deterred from pursuing the acquisition. When a hostile takeover threat arises, e.g., because a hostile acquirer’s ownership in the firm exceeded 20%, the poison pill… Read More »
Sustainable finance is a burgeoning sector, and the jury is still out on whether this is just a bubble, inflated by greenwashing practices, or a genuine step towards better ESG (environmental, social, and governance) conditions – or a combination of the two. Whatever the answer, sustainable finance is likely to remain high on the agenda… Read More »
Since 2007, a novel debt type, green bonds, has emerged as a popular instrument to raise and direct capital toward projects that curb climate change risk. Corporations, government agencies, supranational entities, and municipalities issue these bonds mainly in the US, China, and Europe. Annual green bond issuance has experienced exponential growth from $37.1 in 2014… Read More »
The history of lending discrimination is well-documented in the United States, and the federal government employs a variety of legal mechanisms to fight its effects and promote lending equity. One such tool is the Community Reinvestment Act (CRA) which Congress passed in 1977. The CRA was designed to encourage banks to lend in the geographic… Read More »
Can ChatGPT with Explainable AI interpret explain black box models to non-financial professionals? If the answer is yes, the following question arises: Is it necessary to maintain our protective financial regulatory regime if these robo-advisors can effectively translate complicated financial knowledge to the public? Under the current regulatory framework, only accredited investors, defined as those… Read More »
In the aftermath of the Global Financial Crisis of 2007-2008, there was a heated public debate about the causes of the crisis and what policies should be adopted to ensure that history would not repeat itself. Many people and policymakers pointed their fingers at the lax accounting standards that seemingly allowed financial institutions to take… Read More »
Corporate bankruptcy law is a tool to resolve the financial distress of corporations. Unviable corporations are liquidated and the proceeds distributed to the creditors. Viable corporations are restructured and put on a new financial footing. Following the model of Chapter 11 of the US Bankruptcy Code, many jurisdictions worldwide have strengthened or introduced such restructuring… Read More »
