This Report, commissioned by the German Council of Economic Experts (Der Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung), addresses the key institutional and regulatory differences between the American and European securitization markets. In particular, it considers...

This short essay sets forth the case for permitting modification of all residential mortgages in bankruptcy as an important step in easing the foreclosure crisis, stabilizing the financial system, and protecting against systemic risk going forward

For over a century, bankruptcy has been the primary legal mechanism for resolving consumer financial distress. In the current foreclosure crisis, however, the bankruptcy system has been ineffective because of the special protection it gives most home mortgages. Debtors may modify the terms of...

Modification-proof contracts boost commitment and can help overcome information problems. But when such rigid contracts are ubiquitous, they can function as social suicide pacts, compelling enforcement despite significant externalities. At the heart of the current financial crisis is a contract...

In recent years, the cost to merchants of accepting credit cards has risen without any corresponding new benefits. This trend has sparked a wide-ranging struggle between merchants and banks, as merchants have begun to seek greater control over payment systems. The conflict is playing itself out...

Courts have repeatedly stated that equitable subordination is a compensatory remedy. This view is demonstrably mistaken; if equitable subordination is compensatory, only injured creditors, and not trustees or debtors in possession, would have Constitutional standing to bring equitable...

This Article argues that a principal-agent problem plays a critical role in the current foreclosure crisis.A traditional mortgage lender decides whether to foreclose or restructure a defaulted loan based on its evaluation of the comparative net present value of those options. Most residential...

This paper examines the policy assumption underlying the special protection given to home mortgages in bankruptcy - namely that protecting lenders from losses in bankruptcy will encourage them to lend more and at lower rates, thus encouraging homeownership. This paper tests this policy...