Feliz Ano Nuevo!

In service of my resolution to blog more regularly (and to take a break from grading)…

I recently posted on ssrn a symposium piece I wrote for the Georgia Law Review that examines how securitization formed a coupling rod that joined together real estate and banking crises. Moreover, changes in banking law improved this transmission line.

Here is the abstract:

This essay examines how securitization served as a new coupling rod joining cycles in real estate and banking markets and created a new pathway for financial contagion in the “subprime” financial crisis. Legal changes promoted the growth of securitization and improved this crisis transmission line. The essay examines the history of legislative and regulatory changes that facilitated bank participation in the markets for mortgage-backed securities. The essay then explains how securitization failed to mitigate the credit, liquidity, and interest rate risk associated with real estate when losses in residential markets became correlated nationwide. It then discusses how regulation contributed to this, as the spread of securitization and financial industry consolidation created a nationwide market for mortgages.

The essay telescopes out from securitization to discuss an often overlooked danger of bank investments in real estate: the cyclicality of real estate losses. The essay analyzes the evidence that real estate prices exhibit positive serial correlation. It also summarizes historical evidence of the correlation between banking and real estate crises. The essay then looks at feedback mechanisms between banking and real estate markets, including research on bank leverage cycles.

The essay next provides a very high level outline of various approaches to decoupling bank and real estate crises and the advantages and drawbacks of various approaches. These approaches include curbing bank investments in real estate and mortgage-backed securities, using bank regulations as a more surgical tool to fix problems with securitization, and developing countercyclical approaches to regulations of mortgage markets and bank investments in them. The essay then concludes by discussing the political dynamics that will shape and constrain any of these policy approaches.

This symposium piece continues a line of research that examines securitization in light of the financial crisis. I’ve looked at how:

¶ regulators outsourced responsibility for regulating markets and financial products to risk models (including models that price securitizations);

¶ securitization creates a channel for failures of consumer financial protection to generate systemic risk;

¶ how securitization provides an example of how contract “patterns” (think “boilerplate” but more conceptual) can modularize contract language and turn contracts into complex transactions and ultimately into new markets for financial instruments; and

¶ asset-backed securities represent an example of "safe assets" constructed by law (see this article, this symposium piece, and this book chapter, all co-written with Anna Gelpern).

A half-dozen or so more pieces and I can write a book: "13 ways of looking at securitization."  Or I can go meta - writing about derivatives and being derivative.

Permalink | Finance, Financial Crisis, Financial Institutions, IPOs | Comments (View) | Bookmark

I'm pleased to share the program announcement for the Business Association and Comparative Law Sections' Joint Program for the 2017 AALS meeting.  I hope to see you there!

 

The AALS Sections on Business Associations and Comparative Law invite you to join us for a joint program at the AALS Annual Meeting on Thursday, January 5, 2017, from 1:30 p.m. to 3:15 p.m., at the Hilton San Francisco Union Square, Continental Parlor 3, Ballroom Level.

Title:  Business Law in the Global Gig Economy:  Legal Theory, Doctrine, and Innovations in the Context of Startups, Scaleups, and Unicorns

Description:  Startups and entrepreneurs have long played an important role in the U.S. economy.  From Henry Ford to Mark Zuckerberg, entrepreneurs have revolutionized the ways in which their customers receive products and services. As Phil Libin, CEO of Evernote, has explained, “There’s lots of bad reasons to start a company. But there’s only one good, legitimate reason, and I think you know what it is: it’s to change the world.”  That philosophy continues today as entrepreneurs disrupt markets and challenge business and legal norms. Traditional notions of the firm, fiduciary duties, contractual bargains, and optimal capital structures may not aptly fit entrepreneurial approaches. Indeed, entrepreneurs’ business models, financing needs, and operational objectives require lawyers and scholars to rethink governance, capital structures, and regulatory schemes that may limit or impede further innovation, both nationally and transnationally.  This program will examine the current and potential role of business, contract, and related laws on entrepreneurs and their business ventures. We hope to create a robust conversation that maps the past and future of legal theory and doctrine related to entrepreneurship—defining that concept broadly in terms of industry and size. Legal entrepreneurs also fit this model as they introduce contractual innovations and disrupt the field of business law itself. Taking a cue from entrepreneurs, the program welcomes all ideas, including those that may disrupt conventional norms.

Format:  The basic format of the session will be the presentation of two papers selected from a call for papers and then a moderated roundtable discussion among the speakers.

Participants:

Speaker: Ms. Cass Matthews, Google, Inc.

Speaker: D. Gordon Smith, Brigham Young University, J. Reuben Clark Law School

Speaker: Cynthia A. Williams, Osgoode Hall Law School York University

Moderator: Michelle M. Harner, University of Maryland Francis King Carey School of Law

Paper: Regulatory Entrepreneurship by Jordan Barry, University of San Diego School of Law, and Elizabeth Pollman, Loyola Law School, Los Angeles

Paper: Catching Disruption:  Regulating Corporate Venture Capital by Jennifer Fan, University of Washington School of Law

Permalink | AALS | Comments (View) | Bookmark

Thanksgiving is my favorite holiday.  For about 14 years we've made Cook's Illustrated's high-roast turkey (butterfly and brine the bird, then roast it at 450 on a broiler pan set atop homemade dressing.  It takes less than 2 hours and the dressing is bastedly divine).  This year, for the first time I let each child pick a recipe from our archive of Cook's Illustrated and Cook's Country magazines for us to make together.  Cara chose a cranberry-apple crumble that was to die for (Cook's Country), Ethan and I made gingerbread cookies that really were worth eating (Cook's Illustrated), and Anna and I made Quaker Bonnet biscuits that were pretty good.  In an egregious lapse of judgment, I elected not to serve said biscuits at Thanksgiving dinner itself (we had a lot of starchy sides already), thus giving my middle child yet another grievance for her tally.

In short, we are loyal fans of the America's Test Kitchen conglomerate.  I love to cook, but I don't get to do it that much anymore.  If I try a new recipe I want to be pretty sure it's going to be good.  Enter these magazines.  Before the recipe you get a detailed description of what worked, what didn't worked, and why.  I want to know that each ingredient and each step is worth it, and I'm not blanching carrots or roasting poblanos for no reason. 

So for our family at least, Christopher Kimball's divorce from the Vermontian empire he's created is big news, as is his new venture Milk Street.  Which was a leetle to close for comfort to the enterprise he left, according to ATK, which filed a suit alleging breach of fiduciary duties, corporate theft, interference with contract, and other goodies.  ATK has a site explaining Why we are suing Christopher Kimball.  Here's the WaPo with 6 takeaways. 

Is it just me, or is there a terrific fact-pattern here?  You can get the complaint, a chronology, and emails there. Of course, this is from a woman constructed a long essay built around a lady entering a series of pie baking contests. 

'Tis the season!

Permalink | Food, Partnerships | Comments (View) | Bookmark

I can't believe it's been so long since I've put fingers to keyboard here!  I really do miss blogging, and hope to return to it with the new year, and a lighter teaching load.  Until then, I'm posting a quick bit of good news, for me and for Georgia Law as a whole: I'm pleased that Christopher Bruner of Washington & Lee will be joining me as a colleague next fall.  I am thrilled! 

Permalink | Law Schools/Lawyering | Comments (View) | Bookmark

I was avoiding Facebook last night during the waning hours of election coverage, but a friends' text sent me there to see the strangest thing.  A friend in Champaign, IL had taken a picture of his TV screen as my photo appeared beside the name Christine Law, who lost her bid to represent the 101st Congressional District in the Illinois statehouse.  Here is the photo:

From a Google search, I can find hardly anything, text or photo, informative about Christine Law. My guess is that some TV news employee was told to find a picture, googled "christine law illinois," and found my photo from the University of Illinois School of Law files. Anyway, it gave at least my FB friends something to chat about other than the state of the election!

Permalink | Administrative | Comments (View) | Bookmark

Michael Risch has the details here, looks like they are looking for a senior scholar in business law and a junior who can teach ethics.

Permalink | Administrative | Comments (View) | Bookmark

The UNIVERSITY OF NEBRASKA COLLEGE OF LAW invites applications for lateral candidates for a tenured faculty position to hold the Clayton K. Yeutter Chair at the College of Law. This chaired faculty position will be one of four faculty members to form the core of the newly-formed, interdisciplinary Clayton K. Yeutter Institute for International Trade and Finance. The Institute also will include the Duane Acklie Chair at the College of Business Associations, the Michael Yanney Chair at the College of Agricultural Sciences, and the Haggart/Works Professorship for International Trade at the College of Law. The Yeutter Chair, along with the other three professors, will be expected to support the work and objectives and ensure the success of the Yeutter Institute. The Yeutter Chair will teach courses at the College of Law, including International Finance. Other courses may include Corporate Finance and/or other related classes pertaining to issues arising in international business and finance. More on the Yeutter Institute can be found at http://news.unl.edu/newsrooms/today/article/giftsestablish-endowed-chairs-for-yeutter-institute/. Minimum Required Qualifications: J.D Degree or Equivalent; Superior Academic Record; Outstanding Record of Scholarship in International Finance and/or other areas related to international business; and Receipt of Tenure at an Accredited Law School.

General information about the Law College is available at http://law.unl.edu/. Please fill out the University application, which can be found at https://employment.unl.edu/postings/51633, and upload a CV, a cover letter, and a list of references. The University of Nebraska-Lincoln is committed to a pluralistic campus community through affirmative action, equal opportunity, work-life balance, and dual careers. See http://www.unl.edu/equity/notice-nondiscrimination. Review of applications will begin on November 5, 2016 and continue until the position is filled. If you have questions, please contact Associate Dean Eric Berger, Chair, Faculty Appointments Committee, University of Nebraska College of Law, Lincoln, NE 68583-0902, or send an email to [email protected].

Permalink | Finance, Globalization/Trade | Comments (View) | Bookmark

National Business Law Scholars Conference (NBLSC)

Thursday & Friday, June 8-9, 2017

Call for Papers

The National Business Law Scholars Conference (NBLSC) will be held on Thursday and Friday, June 8-9, 2017, at the University of Utah S.J. Quinney College of Law. 

This is the eighth meeting of the NBLSC, an annual conference that draws legal scholars from across the United States and around the world.  We welcome all scholarly submissions relating to business law.  Junior scholars and those considering entering the legal academy are especially encouraged to participate. 

To submit a presentation, email Professor Eric C. Chaffee at [email protected] with an abstract or paper by February 17, 2017.  Please title the email “NBLSC Submission – {Your Name}.”  If you would like to attend, but not present, email Professor Chaffee with an email entitled “NBLSC Attendance.”  Please specify in your email whether you are willing to serve as a moderator.  We will respond to submissions with notifications of acceptance shortly after the deadline.  We anticipate the conference schedule will be circulated in May. 

Keynote Speaker:

Lynn A. Stout, Distinguished Professor of Corporate & Business Law, Cornell Law School

Plenary Author-Meets-Reader Panel:

Selling Hope, Selling Risk: Corporations, Wall Street, and the Dilemmas of Investor Protection by Donald C. Langevoort, Thomas Aquinas Reynolds Professor of Law, Georgetown Law School

Commentators:

Jill E. Fisch, Perry Golkin Professor of Law, University of Pennsylvania Law School

Steven Davidoff Solomon, Professor of Law, University of California, Berkeley School of Law

Hillary A. Sale, Walter D. Coles Professor of Law, Washington University School of Law

Conference Organizers:

Tony Casey (The University of Chicago Law School)
Eric C. Chaffee (The University of Toledo College of Law)
Steven Davidoff Solomon (University of California, Berkeley School of Law)
Joan Heminway (The University of Tennessee College of Law)
Kristin N. Johnson (Seton Hall University School of Law)
Elizabeth Pollman (Loyola Law School, Los Angeles)
Margaret V. Sachs (University of Georgia School of Law)
Jeff Schwartz (University of Utah S.J. Quinney College of Law)

Please save the date for NBLSC 2018, which will be held Thursday and Friday, June 21-22, at the University of Georgia School of Law

Permalink | Calls for Papers | Comments (View) | Bookmark

Another win for incomplete contracts.  The Nobel's release on contract theory is here; NYT article here.  Oliver Hart's bibliography has links/downloads to many of his articles.  For law audiences, you might want to check out "An Economist's Perspective on the Theory of the Firm."  Here's Bengt Holmstrom's publication list.  I'm curious about how these award pairings are made -- what about Sanford Grossman & John Moore?

Permalink | | Comments (View) | Bookmark

Francesca and I are proud to announce the publication of a book that may be of interest to readers.  Great contributors, great chapters, in a great series; we are happy to be a part of it.  An overview of the volume can be found on the publisher's website.   and the official electronic version of the book is available here.  And here's the elegant cover:

Permalink | Administrative Law, Globalization/Trade | Comments (View) | Bookmark

We like Wisconsin on this here blog, and Whitewater is appealingly located.  They are hiring two people, details and link after the jump.

more ...

Permalink | Business Ethics, Business Organizations | Comments (View) | Bookmark

Chris got a unanimous vote, so good news.  The Wall Street Journal on the state of the nominations of the two law professors here.

Permalink | Administrative Law, Securities | Comments (View) | Bookmark

I'm not sure whether to call it the power of regulation, the fact that investors like being deluded about the value of assets they hold, or the existence of an implicit government guarantee.  But as OFR notes, investors are getting out of funds with gates and floating asset values, and getting into funds with fixed asset values (even if they also have feeds and gates).  Not sure what to make of it, but the change is marked, and surely attributable to regulation.

Permalink | Administrative Law, Finance, Financial Institutions | Comments (View) | Bookmark

It's not the last word or anything, but I found this survey of entry level classes of City of London banks to be interesting (I'm in the UK for the semester).  Less than half Brits, and 14% Italian, more than any European country/ethnicity/whatever, including Germany and France if you like your countries big, Spain if you like your countries poor, and Ireland if you like your countries English speaking.  This anonymous banker thinks it is because Italians are desperate and charming.  Your mileage may vary!  

Permalink | Finance, Financial Institutions | Comments (View) | Bookmark

Positions below:

Executive Director

The Harvard Law School Program on Corporate Governance invites applications for the position of Executive Director. Together with the Faculty Director and others, the Executive Director of the Program works on building, developing, and managing the full range of activities of the Program. Under the Faculty Director’s oversight, the Executive Director manages the wide range of the Program’s operations; collaborates with major corporations, law firms, investors, advisers, and other organizations; participates in developing and directing conferences and other events for the Program; and manages the administration and personnel of the program, including fellows, research assistants, and staff. The Executive Director also collaborates with constituent groups and other professionals; participates in fundraising activities; interacts with donors and visitors; and takes on other management roles within the Program as needed. The Executive Director is involved in overseeing the Program’s website and other media outreach efforts, as well as the Program’s blog, the Harvard Law School Forum on Corporate Governance and Financial Regulation.

Applications will be considered on a rolling basis. Candidates should have a J.D. or another graduate degree in law, policy, or social science, and 3+ years of experience in a relevant field of law or policy. This is a full-time term appointment. Start date is flexible. Additional information on the Executive Director position, as well as detailed instructions on how to apply, is available through ASPIRE.

Academic Fellow

The Harvard Law School Program on Corporate Governance invites applications for Post-Graduate Academic Fellows. Candidates should be interested in spending two or three years at Harvard Law School in preparation for a career in academia or policy research, and should have a J.D., LL.M. or S.J.D. from a U.S. law school (or expect to have completed most of the requirements for such a degree by the time they commence their fellowship). During the term of their appointment, Post-Graduate Academic Fellows work on research and corporate governance activities of the Program, depending on their interests and Program needs. Fellows may also work on their own research and publishing, and some former Fellows of the Program now teach in leading law schools in the U.S. and abroad.

Applications are considered on a rolling basis. Interested candidates should submit a CV, list of references, law school grades, and a writing sample and cover letter to the coordinator of the Program, Ms. Jordan Figueroa, at [email protected]. The cover letter should describe the candidate’s experience, reasons for seeking the position, career plans, and the kinds of Program projects and activities in which they would like to be involved. The position includes Harvard University benefits and a competitive fellowship salary. Start date is flexible.

Permalink | Administrative | Comments (View) | Bookmark