Excessive risk-taking by systemically important financial firms was one of the leading causes of the financial crisis. Research suggests these firms may be no safer today than they were pre-crisis, and they may even be increasing their risk-taking. Risk-taking is inherently a corporate...

Whether or not their fault, nations sometimes borrow at levels that become unsustainable. Until resolved, the resulting debt burden hurts not only those nations but also their citizens, their creditors, and — by posing serious systemic risks to the international financial system — the wider...

Most of the regulatory measures to control excessive risk taking by systemically important firms are designed to reduce moral hazard and to align the interests of managers and investors. These measures may be flawed because they are based on questionable assumptions. Excessive corporate risk...

To protect economic stability, post-crisis regulation requires financial institutions to clear and settle most of their derivatives contracts through central counterparties, such as clearinghouses associated with derivatives and commodity exchanges. This Article asks whether regulators should...

This is an unedited draft of the closing chapter of a forthcoming book, entitled Systemic Risk in the Financial Sector: Ten Years After the Great Crash, that will be published by CIGI Press in fall 2019 (edited by Douglas W. Arner, Emilios Avgouleas, Danny Busch, and Steven L. Schwarcz). The...

A decade after the financial crisis, regulators worry that the regulation enacted to help stabilize the financial system may be insufficient to prevent another crisis. Examining that regulation with the benefit of hindsight, this Article finds that much has been accomplished but much remains to...

This essay uses consequence-based inquiry (“CBI”) to derive a normative framework for determining when financial market changes should drive legal changes. This framework can improve the current ad hoc and politically distorted lawmaking process, which often results in over- or...

How should we think about regulating our dynamically changing financial system? Existing regulatory approaches have two temporal flaws. The obvious flaw, driven by politics and human nature (and addressed in other writings), is that financial regulation is overly reactive to past crises. This...

In an earlier article, I argued that shadow banking — the provision of financial services and products outside of the traditional banking system, and thus without the need for bank intermediation between capital markets and the users of funds — is so radically transforming finance that...

As the financial crisis has tragically illustrated, the complexities of modern financial markets and investment securities can trigger systemic market failures. Addressing these complexities, this article maintains, is perhaps the greatest financial-market challenge of the future. The article...