Found 584 article(s) in category 'Regulation'

The Hazards of Expert Control: Chief Risk Officers and Risky Derivatives

The Hazards of Expert Control: Chief Risk Officers and Risky Derivatives. Frank Dobbin, May 31, 2017, Paper, “At the turn of the century, regulators introduced policies to control bank risk-taking. Many banks appointed chief risk officers (CROs), yet bank holdings of new, complex, and untested financial derivatives subsequently soared. Why did banks expand use of new derivatives? We suggest that CROs encouraged the rise of new derivatives in two ways. First, we build on institutional arguments about the expert construction of compliance, suggesting that risk experts arrived with an agenda of maximizing risk-adjusted returns, which led them to favor the derivatives. Second, we build on moral licensing arguments to suggest that bank appointment of CROs induced “organizational licensing,” leading trading-desk managers to reduce policing of their own risky behavior.Link

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How Laws and Culture Hold Back Socially Minded Companies

How Laws and Culture Hold Back Socially Minded Companies. George Serafeim, May 17, 2017, Paper, “Lots of business leaders want their organizations to have a positive social impact. They’d like to pursue a purpose and do good, not just deliver financial results. So why don’t they? In our conversations with business leaders we have heard two recurring obstacles: a culture of short-termism and the fact that corporate law puts shareholders first.Link

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Human Agency and Behavioral Economics Nudging Fast and Slow

Human Agency and Behavioral Economics: Nudging Fast and Slow. Cass Sunstein, 2017, Book, “This groundbreaking series is designed to make available in book form unique behavioral economic contributions. It provides a publishing opportunity for behavioral economist authors who have a novel perspective and have developed a special ability to integrate economics with other disciplines. It will allow these authors to fully develop
their ideas. In general, it is not a place for narrow technical contributions. Theoretical/conceptual, empirical, and policy contributions are all

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Independent Directors and Controlling Shareholders

Independent Directors and Controlling Shareholders. Lucian Bebchuk, May 2017, Paper, “This Article is part of the research of the Controlling Shareholders Project of the Harvard Law School Program on Corporate Governance. The Article was partly written while Hamdani was a visiting professor at Harvard Law School during the fall of 2015. As detailed below, during the years 2006–2008 and 2011–2012, the authors contributed to reforming Israeli corporate law in directions advocated in this Article, and this Article draws on the authors’ work and experience in connection with those reforms.Link

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The Untenable Case for Perpetual Dual-Class Stock

The Untenable Case for Perpetual Dual-Class Stock. Kobi Kastiel, Lucian Bebchuk, April 24, 2017, Paper, “We recently placed on SSRN our study, The Untenable Case for Perpetual Dual-Class Stock. The study, which will be published by the Virginia Law Review in June 2017, analyzes the substantial costs and governance risks posed by companies that go public with a long-term dual-class structure.  The long-standing debate on dual-class structure has focused on whether dual-class stock is an efficient capital structure that should be permitted at the time of initial public offering (“IPO”). By contrast, we focus on how the passage of time since the IPO can be expected to affect the efficiency of such a structure.Link

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Reforming land use regulations

Reforming land use regulations. Edward Glaeser, April 22, 2017, Opinion, “Arguably, land use controls have a more widespread impact on the lives of ordinary Americans than any other regulation. These controls, typically imposed by localities, make housing more expensive and restrict the growth of America’s most successful metropolitan areas. These regulations have accreted over time with virtually no cost-benefit analysis. Restricting growth is often locally popular. Promoting affordability is hardly a financially attractive aim for someone who owns a home. Yet the maze of local land use controls imposes costs on outsiders, and on the American economy as a whole.Link

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Is the SEC Captured? Evidence from Comment-Letter Reviews

Is the SEC Captured? Evidence from Comment-Letter Reviews. Jonas Heese, Karthik Ramanna, April 8, 2017, Paper, “SEC oversight of publicly listed firms ranges from comment letter (CL) reviews of firms’ reporting compliance to pursuing enforcement actions against violators. Prior literature finds that firm political connections (PC) negatively predict enforcement actions, inferring SEC capture. We present new evidence that firm PC positively predict CL reviews and substantive characteristics of such reviews, including the number of issues evaluated and the seniority of SEC staff involved. These results, robust to identification concerns, are inconsistent with SEC capture and indicate a more nuanced relation between firm PC and SEC oversight than previously suggested.Link

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Impact of Reporting Frequency on UK Public Companies

Impact of Reporting Frequency on UK Public Companies. Robert Pozen, 2017, Paper, “Beginning in 2007, UK public companies were required to issue quarterly, rather than semiannual, financial reports. But the UK removed this quarterly reporting requirement in 2014. We studied the effects of these regulatory changes on UK public companies and found that the frequency of financial reports had no material impact on levels of corporate investment. However, mandatory quarterly reporting was associated with an increase in analyst coverage and an improvement in the accuracy of analyst earnings forecasts.Link

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The Future of Patent Examination at the USPTO

The Future of Patent Examination at the USPTO. Prithwiraj Choudhury, Tarun Khanna, April 2017, Case, “The U.S. Patent and Trademark Office (USPTO) is the federal government agency responsible for evaluating and granting patents and trademarks. In 2015, the USPTO employed approximately 8,000 patent examiners who granted nearly 300,000 patents to inventors. As of April 2016, it took roughly 26 months for a patent application to move through the evaluation process, which exceeded the office’s processing goal of 20 months. In August 2016, Andrew Hirshfeld, the commissioner for patents at the USPTO, considered the current state of patent examination and future possibilities. In recent years, a number of new and exciting tools enabled by advances in telework, machine learning, and other approaches had emerged. Hirshfeld hoped to maximize these tools’ utility in order to enhance patent examiners’ work and productivity.Link

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