Föhrenbergkreis Finanzwirtschaft

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Posts Tagged ‘Roe’

Don’t Bank on Bankruptcy for Banks

Posted by hkarner - 19. Oktober 2017

Mark Roe is a professor at Harvard Law School. He is the author of studies of the impact of politics on corporate organization and corporate governance in the United States and around the world.

As a part of their efforts to roll back the 2010 Dodd-Frank Act, congressional Republicans have approved a measure that would have courts, rather than regulators, oversee megabank bankruptcies. It is now up to the Trump administration to decide if it wants to set the stage for a repeat of the Lehman Brothers collapse in 2008.

CAMBRIDGE – In the next month, the US Treasury Department is expected to decide whether to seek to replace the 2010 Dodd-Frank Act’s regulator-led process for resolving failed mega-banks with a solely court-based mechanism. Such a change would be a mistake of potentially crisis-size proportions. 

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Has France Really Rejected Populism?

Posted by hkarner - 29. April 2017

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Could Hensarling’s Dodd-Frank “Off-Ramp” Work?

Posted by hkarner - 13. Juli 2016

Photo of Mark Roe

Mark Roe

Mark Roe is a professor at Harvard Law School. He is the author of studies of the impact of politics on corporate organization and corporate governance in the United States and around the world.
 

JUL 12, 2016, Project Syndicate

CAMBRIDGE – Jeb Hensarling, the Republican chair of the Financial Services Committee in the US House of Representatives, delivered a wide-ranging speech last month at the Economic Club of New York, proposing to overhaul US financial regulation. Hensarling blamed regulators and excused Wall Street for the financial crisis; condemned government-funded bank bailouts; characterized the 2010 Dodd-Frank financial-reform legislation as a power grab; and called for increased congressional oversight of the Federal Reserve.

Most of Hensarling’s proposals – even backed, as they now are, by a partisan-sounding document from the House Banking committee and a favorable Wall Street Journal review – are political nonstarters. (They would have to get 60 Senate votes and a presidential signature to pass.) They have already been sharply criticized by Democrats as being too risky and pro-bank – which they largely are. That said, one of Hensarling’s ideas is well worth exploring: an “off-ramp,” as he put it, from Dodd-Frank regulation for banks that willingly increase their available capital. Den Rest des Beitrags lesen »

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The Imaginary Threat of Short-Termism

Posted by hkarner - 20. Oktober 2015

Photo of Mark Roe

Mark Roe

Mark Roe is a professor at Harvard Law School. He is the author of studies of the impact of politics on corporate organization and corporate governance in the United States and around the world.

OCT 20, 2015, Project Syndicate

CAMBRIDGE – The idea that financial markets are too focused on the short term is gaining ground in the media and among academics. And now it is attracting political attention in the United States.

Investors’ obsession with short-term returns, according to the new conventional wisdom, compels corporate boards of directors and managers to seek impressive quarterly earnings at the expense of strong long-term investments. Research and development suffers, as does long-term investment in plant and equipment. Similarly, short-term thinking leads major companies to buy back their stock, thereby sapping them of the cash they need for future investments.

None of this is good news for the economy – at least, it wouldn’t be, if it were real. Upon closer inspection, the supposed negative consequences of investor short-termism appear not to be happening at all. Den Rest des Beitrags lesen »

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Europe and Greece on the Brink

Posted by hkarner - 5. Juli 2015

CAMBRIDGE – A deal between Greece and its creditors might not happen. Several factors are in flux; Greek and northern European interests are not aligned; and personal animosities are in play. For Greece, an exit from the euro would not be easy, but if the alternative is endless austerity without debt forgiveness, its government may conclude that leaving the eurozone is the better choice.

Germany, for its part, would prefer to avoid a Greek exit – a position that Greek Finance Minister Yanis Varoufakis seems to have been banking on. But the German public largely wants to punish Greece, and German Chancellor Angela Merkel does not want to set a precedent for recurring bailouts of the European Union’s weaker members.

Failure to reach an agreement would be painful for Greece, which would face chaotic economic conditions. But an exit from the euro would also provide its government with new options – most notably, the ability devalue its currency to make its exports more competitive. For the rest of Europe, however, the risk is mostly on the downside, because beyond the obvious losses that would be incurred if Greece does not pay its debt to European governments and international institutions, there is the wider worry that the crisis could reverberate through the continent’s real economy. Den Rest des Beitrags lesen »

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