Tag Archives: markets

How Does Deleveraging Affect Funding Market Liquidity?

By | August 31, 2022

Financial institutions are highly leveraged due to the extremely low interest rates of the past decade. However, interest rates are now rising worldwide due to inflationary pressures, which can lead to plunging stock markets and significant deleveraging of financial institutions. Policymakers, academics, and practitioners are concerned about the impact of deleveraging. In our recent paper,… Read More »

A MACRO-LEVEL INVESTIGATION OF TRANSATLANTIC CONTROLLING SHAREHOLDER’S FIDUCIARY DUTY

By | July 30, 2021

Legal systems around the world apply various strategies to mitigate agency costs between controlling and minority shareholders. In my recent paper, I provide a systematic review of the transnational law on controlling shareholder’s loyalty and care obligations by exploring the cultural, historical, and socio-economic backgrounds embodied in different doctrinal choices. A. Doctrinal Strategies for Regulating Controlling… Read More »

INSIDER TRADING AS A RESPONSE TO SOCIAL-MEDIA-DRIVEN TRADING

By | July 1, 2021

Expressive Trading and Markets The phenomenon of social-media-driven trading (SMD trading) entered the public consciousness earlier this year when GameStop’s stock price was driven up two orders of magnitude by a “hivemind” of individual investors coordinating their actions via social media. Some believe that GameStop’s price is artificially high and is destined to fall. Yet the stock prices of… Read More »

Corporate Governance at Play: Between Law and Its Perception

By | June 23, 2021

When firms go through an Initial Public Offering (IPO), their corporate governance changes by becoming more complex to reflect the requirements of a public firm. At the same time, there are many mechanisms at play due to the presence of different categories of owners: insiders vs. outsiders, founders vs. venture capital investors, etc. Therefore, the… Read More »

SEC Climate Risk Disclosure Comment Letter: Executive Summary

By | June 22, 2021

Climate change poses serious risks to almost every aspect of the economy, and its impacts will have long-term disruptive effects on financial markets around the world. Currently, these risks are not adequately addressed by financial regulators in the United States. As a result, climate-related information is not accurately incorporated into financial markets, leaving firms, investors,… Read More »

Why Do Lenders Include Cost Savings and Synergy Add-backs in Loan Agreements?

By | June 9, 2021

Accounting is conservative. Under Generally Accepted Accounting Principles (GAAP), a firm should recognize losses before the losses are realized but postpone the recognition of gains until the gains are realized. In other words, the conservative accounting principle promotes timely loss recognition at the expense of timely gain recognition. However, in debt contracting, where lenders and… Read More »