Found 38 article(s) for author 'Mark Roe'

Measuring the Costs of “Too Big To Fail”

Measuring the Costs of “Too Big To Fail.” Mark Roe, June 26, 2013, Opinion. “The idea that some banks are “too big to fail” has emerged from the obscurity of regulatory and academic debate into the broader public discourse on finance. Bloomberg News started the most recent public discussion, criticizing the benefit that such banks receive – a benefit that a study released by the International Monetary Fund has shown to be quite large. Bankers’ lobbyists and representatives dismissed the Bloomberg editorial for citing a single study, and for relying on rating…” Link 

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The Dodd-Frank Act’s Maginot Line: Clearinghouse Construction

The Dodd-Frank Act’s Maginot Line: Clearinghouse Construction. Mark Roe, May 8, 2013, Opinion. “Regulatory reaction to the 2008–2009 financial crisis, following the failures of AIG, Bear Stearns, Lehman Brothers, and the Reserve Primary Fund, focused on complex financial instruments that deepened the crisis. A consensus emerged that these risky financial instruments should move through safe, strong clearinghouses, which would be bulwarks against systemic risk. The consensus turned into law, via the Dodd-Frank Wall Street Reform Act, in which Congress instructed regulators to construct clearinghouses…” Link verified June 19, 2014

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A Capital Market, Corporate Law Approach to Creditor Conduct

A Capital Market, Corporate Law Approach to Creditor Conduct. Mark Roe, May 1, 2013, Paper. “The problem of creditor conduct in distressed firms — for which policymakers ought to have the economically-sensible repositioning of the distressed firm as a central goal — has vexed courts for decades. Because courts have not come to coherent, stable doctrine to regulate creditor behavior and because they do not focus on using doctrine to facilitate the sensible repositioning of the distressed firm, social costs arise and those costs may be substantial…” Link verified June 19, 2014

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Apple’s Cash-Flow Problem

Apple’s Cash-Flow Problem. Mark Roe, April 18, 2013, Opinion. “I recently examined the problem of corporate short-termism from two nonstandard angles. One was that some short-termism is sensible. Large firms face an increasingly fluid economic, technological, and political environment – owing to more global and competitive markets, to the greater potential of technological change to alter firms’ business environment, and to governments’ growing influence over what makes business sense. In this fluid environment, large companies must be cautious before making large, long-term commitments…” Link verified March 28, 2014

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London Whale is the Cost of Too Big to Fail

London Whale is the Cost of Too Big to Fail. Mark Roe, March 25, 2013, Opinion. “The report by the US Senate staff on JPMorgan Chase’s “London Whale” trades, delivered last Friday, excoriates the bank for failing to make the full extent of the problem known to regulators and the public. But a focus on who knew what when can result in missing the big point: the cost of our too-big-to-fail banks is even heftier than is widely appreciated.The conventional wisdom in many circles is that the losses caused by the trades are regrettable but we can all move on…” Link verified June 19, 2014

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Are Stock Markets Really Becoming More Short Term?

Are Stock Markets Really Becoming More Short Term? Mark Roe, February 21, 2013, Opinion. “In a recent commentary, I examined whether increasing pressure from more rapid stock trading is inducing corporate managers to obsess more over quarterly results, impairing their capacity to run their firms for the long term. But I noted how pressures from governments and rapid technological change are potentially just as powerful as those from stock-market trading. How carefully can one plan for the long term in, say, the eurozone, if the currency itself is at risk? And how long should brick-and-mortar retailers’ time horizons…” Link verified March 28, 2014

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Empowering Financial Bankruptcy

Empowering Financial Bankruptcy. Mark Roe, January 13, 2013, Opinion. “Four of the world’s most important financial regulators – the Bank of England, Germany’s Federal Financial Supervisory Authority (BaFin), the US Federal Deposit Insurance Corporation, and the Swiss Financial Market Supervisory Authority – recently asked the world’s derivatives industry to change the way it does business. The question now is whether the regulators can make that happen with a request, as opposed to something more substantial. That will not be easy. The regulators’ tersely worded letter to the International Swaps and Derivatives…” Link verified March 28, 2014

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Political Instability: Effects on Financial Development, Roots in the Severity of Economic Inequality

Political Instability: Effects on Financial Development, Roots in the Severity of Economic Inequality. Mark Roe and Jordan Siegel, February 3, 2011, Paper. “We here bring forward strong evidence that political instability impedes financial development, with its variation a primary determinant of differences in financial development around the world. As such, it needs to be added to the short list of major determinants of financial development. First, structural conditions first postulated by Engerman and Sokoloff (2002) as generating long-term inequality are shown here empirically to be exogenous determinants of political instability…” Link

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