When he isn't suing EA, Lucian Bebchuk is drafting proposals to fix our current crisis. I'm having enough trouble just trying to keep up with what's going on and weaving the current crisis into my teaching...Talk about an engaged corporate law professor!

A taste:

The proposed redesign is based on four interrelated elements:

• No overpaying for troubled assets: The Treasury’s authority to purchase troubled assets should be limited to doing so at fair market value.

• Addressing undercapitalization problems directly: Because the purchase of troubled assets at fair market value may leave financial firms severely under-capitalized, the Treasury’s authority should be expanded to allow purchasing, again at fair market value, new securities issued by financial institutions in need of additional capital.

• Market-based discipline: to ensure that purchases are made at fair market value, the Treasury should conduct them through multi-buyer competitive processes with appropriate incentives.

• Inducing infusion of private capital: to further expand the capital available to the financial sector, and to reduce the use of public funds for this purpose, financial firms should be required or induced to raise capital through right offerings to their existing shareholders.

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