Volcker Rule suggests a break-up of 'too big to fail' financial institutions to prevent future costly bailouts and great recessions. We need to (i) regulate derivative trading to make it more transparent, (ii) fix conflicts of interest in ratings agencies, (iii) ban shadow-banking and...

This paper considers estimation situations where identification, endogeneity and non-spherical regression error problems are present. Instead of always using GMM despite weak instruments to solve the endogeneity, it is possible to first check whether endogeneity is serious enough to cause...

Since causal paths are important for all sciences, my package 'generalCorr' provides sophisticated R functions using four orders of stochastic dominance and generalized partial correlation coefficients. A new test (in Version 1.0.3) replaces Hausman-Wu medieval-style diagnosis of endogeneity...

Congress must be applauded for the corporate governance reforms enacted in Sarbanes-Oxley Act of 2002, although some areas involving Banks and Brokerage houses need further reform. This paper argues that we need to cancel the spirit of the 1999 repeal of the 1933 Glass-Steagall Act by forcing...

Many of us in the anticorruption community have been calling for better enforcement of quot;Conflict of Interestquot; provisions of existing laws, ban on shell corporations, especially those in money laundering havens. It is clear that if these had been followed, Enron fraud might have been...

In this paper we examine estimation risk in the well-known Morningstar mutual fund star rating system. We show that due to using a system that rates funds regardless of age differences, Morningstar has created a situation where the estimates upon which younger funds ratings are based have...

Sharpe's (1966) portfolio performance ratio, the ratio of the portfolio?s expected return to its standard deviation, is a very well known tool for comparing portfolios. However, due to the presence of random denominators in the definition of the ratio, the sampling distribution of the Sharpe...

This paper addresses three rarely examined empirical issues relating to corporate boards using a sample of 157 firms over the period 1974 to 1983. First, various effects of increasing the proportion of quot;outsidersquot; on the board of directors are examined. We utilize survival (or...

While most commentators seem pessimistic about solving current economic problems exhibiting gloom and doom, I argue that concerted monetized government spending (without any debt or taxes to match) by Euro-zone, US and Japan can quickly help reduce many of the current imbalances in the world...

The worldwide reach, size ($50B) and durability (since 1960) of Madoff's alleged Ponzi is attributed to the high reputation of Jewish money managers, serious regulatory lapses including incompetence and possible conflicts of interest by FCC, SEC and other regulators and auditors. Madoff seems to...