Much regulatory effort has been devoted to improving mortgage lending, the principal source of housing finance. To date, that effort has primarily been microprudential — intended to correct market failures in order to increase economic efficiency. In contrast, and while there is some overlap,...

This testimony is based on the results of Prof. Schwarcz's research over the past year on systemic risk, such research and results being more fully set forth in the forthcoming paper, quot;Systemic Risk,quot; which is available at http://papers.ssrn.com/abstract=1008326

The coronavirus has produced a public health debacle of the first-order. But the virus is also propagating the kind of exogenous shock that can precipitate – and to a considerable degree is already precipitating – a systemic event for our financial system. This currently unfolding systemic...

This article is the first major work of legal scholarship on systemic risk, under which the world's financial system can collapse like a row of dominos. There is widespread confusion about the causes and even the definition of systemic risk, and uncertainty how to control it. This article...

To try to protect the stability of the financial system, regulators and policymakers have been extending bankruptcy-resolution techniques beyond their normal boundaries. To date, however, their efforts have been insufficient, in part because bankruptcy law traditionally has microprudential goals...

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...

Unresolved sovereign debt problems and disruptive litigation are hurting debtor nations and their citizens, as well as their creditors. A default can also pose a serious systemic threat to the international financial system. Yet the existing “contractual” approach to sovereign debt...

Sovereign debt restructuring strategies have been mostly reactive, applying only once a nation's debt burden becomes unsustainable. Reactive strategies are suboptimal for many reasons, including that international law does not yet provide mechanisms—in the corporate sector, provided by...

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...