Decision-Making during the Crisis: Why did the Treasury let Commercial Banks fail?

Limited attention has been paid to the comparative fate of banks benefiting from TARP Capital Purchase Program (CPP) funding and less fortunate banks subject to FDIC resolution. We address this omission by investigating two core...

Empowering the ECB to Supervise Banks: A Choice-Based Approach

The Governance of Financial Supervisors: Improving Responsiveness to Market Developments

On-Going Board Reforms: One-Size-Fits-All and Regulatory Capture

Company and Takeover Law Reforms in Europe: Misguided Harmonization Efforts or Regulatory Competition?

Governments as Investors of Last Resort Credit Crisis Comparative Case Studies

Using Basel II to Facilitate Access to Finance: The Disclosure of Internal Credit Ratings

Optional Rather than Mandatory EU Company Law: Framework and Specific Proposals

A Financial Force to be Reckoned With? An Overview of Sovereign Wealth Funds

Sovereign Wealth Funds (SWFs) represent a new form of investment organizational structure and have grown to over $5.7 trillion assets under management by February 2016, making them a financial force potentially worth reckoning with...

Beyond Ownership: State Capitalism and the Chinese Firm

Chinese state capitalism has been treated as essentially synonymous with state-owned enterprises (?SOEs?). But drawing a stark distinction between SOEs and privately owned enterprises (?POEs?) misperceives the reality of China?s...

China as a "National Strategic Buyer": Towards a Multilateral Regime for Cross-Border M&A

Unlike the case of cross-border trade, there is no explicit international governance regime for cross-border M&A; rather, there is a shared understanding that publicly traded companies are generally for purchase by any bidder...

Shifting Influences on Corporate Governance: Capital Market Completeness and Policy Channeling

Corporate governance scholarship is typically portrayed as driven by single factor models, for example, shareholder value maximization, director primacy or team production. These governance models are Copernican; one factor is...

Bonded to the State: A Network Perspective on China?s Corporate Debt Market

A corporate bond market is thought to play an important role as a supplement to bankoriented financial systems in emerging markets ? functioning in effect as a ?spare tire.? Yet bond markets typically rely upon a formal institutional...

Sovereign Wealth Funds and Corporate Governance: A Minimalist Response to the New Mercantilism

Governance Challenges of Listed State-Owned Enterprises around the World: National Experiences and a Framework for Reform

Despite predictions of their demise in the aftermath of the collapse of socialist economies in Eastern Europe, state-owned enterprises (SOEs) are very much alive in the global economy. The relevance of listed SOEs — firms still...

The State as Owner - China's Experience

This essay explores China’s experience with state ownership of business enterprise. After a short historical survey of the rise, fall, and re-emergence of the state-owned enterprise (SOE) as a form of business organization, the...

RPTs in SOEs: Tunneling, Propping, and Policy Channeling

This essay, prepared for a volume on related-party transactions (RPTs), explores the economic, legal and policy challenges associated with RPTs in state-owned enterprises (SOEs). We show that RPTs in SOEs differ from RPTs in...

Where Do Firms Incorporate? Deregulation and the Cost of Entry

We study how deregulation of corporate law affects the decision of entrepreneurs of where to incorporate. Recent rulings by the European Court of Justice (ECJ) have enabled entrepreneurs to select their country of incorporation...

Does Mandatory Shareholder Voting Prevent Bad Acquisitions?

Shareholder voting on corporate acquisitions is controversial. In most countries acquisition decisions are delegated to boards and shareholder approval is discretionary, which makes existing empirical studies inconclusive. We...

Returns to Hedge Fund Activism: An International Study

This paper provides evidence on the incidence, characteristics, and performance of activist engagements across countries. We find that the incidence of activism is greatest with high institutional ownership, particularly for U.S....

Returns to Shareholder Activism: Evidence from a Clinical Study of the Hermes U.K. Focus Fund

This article reports a unique analysis of private engagements by an activist fund. It is based on data made available to us by Hermes, the fund manager owned by the British Telecom Pension Scheme, on engagements with management in...

Should Shareholders Have a Say on Acquisitions?

Shareholders of U.S. corporations have lost billions of dollars in acquisitions they never approved. In the United Kingdom the listing rules give shareholders a binding say when targets are large relative to...

Reciprocity in Takeovers

The European Commission has proposed a Takeover Directive that aims to make the control of European corporations more contestable. The European Parliament and Germany will not adopt the Directive unless it provides for reciprocity in...

Corporate Governance Through Voice and Exit

How do active managers engage with portfolio firms? And, what role does monitoring and engagement play in their trading decisions? We use proprietary data from a large UK active asset manager with a long-standing commitment to...

Loyalty Shares with Tenure Voting - Does the Default Rule Matter? Evidence from the Loi Florange Experiment

The contractual theory of the firm predicts that companies adopt charters that maximise firm value, regardless of the default rule. We test this proposition around an exogenous switch of the default from one share-one vote to tenure...

The Impact of Hedge Fund Activism: Evidence and Implications

Hedge fund activism has increased almost hyperbolically. Some view this optimistically as a means for bridging the separation of ownership and control; others are more pessimistic, seeing mainly wealth transfers from bondholders or...

Global Settlements: Promise and Peril

In 2010, Morrison v. National Australia Bank Ltd. destabilized the world of securities litigation by denying those who purchased their securities outside the U.S. the ability to sue in the U.S. (as they had previously often done)....

Extraterritorial Financial Regulation: Why E.T. Can?t Come Home

Systemic risk poses a classic ?public goods? problem. All nations want systemic stability, but most would prefer that other nations pay for it, allowing them to ?free ride.? Moreover, because global financial institutions can park...

Why Do Auditors Fail? What Might Work? What Won't?

Auditing failures and scandals have become commonplace. In response, reformers (including the Kingman Review in the U.K and a recent report of the U.K.’s Competition and Market Authority) have proposed a variety of remedies,...

The Future of Disclosure: ESG, Common Ownership, and Systematic Risk

The U.S. securities markets have recently undergone (or are undergoing) three fundamental transitions: (1) institutionalization (with the result that institutional investors now dominate both trading and stock ownership); (2)...

Mapping the Future of Insider Trading Law: Of Boundaries, Gaps, and Strategies

The current law on insider trading is arbitrary and unrationalized in its limited scope in a number of respects. For example, if a thief breaks into your office, opens your files, learns material, nonpublic information, and trades on...

Litigation Governance: Taking Accountability Seriously

Both Europe and the United States are rethinking their approach to aggregate litigation. In the United States, class actions have long been organized around an entrepreneurial model that uses economic incentives to align the interest...

The Agency Costs of Activism: Information Leakage, Thwarted Majorities, and the Public Morality

Few doubt that hedge fund activism has radically changed corporate governance in the United States -- for better or for worse. Proponents see activists as desirable agents of change who intentionally invest in...

Good News for Some Banks

Bankers are directors of Federal Reserve Banks. I document that a) banker directors of the New York Fed attend more meetings about the financial sector; b) elections for Reserve Bank directorships are more contested for bankers, but...

Women in Finance

Across countries, banks have less gender diverse boards than other firms. Bank board diversity is particularly low in countries with greater gender gaps in PISA math scores and lower average math scores. We find similar results using...

Boards, and the Directors Who Sit on Them

Boards of directors are intellectually interesting; the literature on boards has academic impact, and there is substantial scope for this literature to have policy impact. I illustrate these points by combining a select review of...

Identifying the Effect of Managerial Control on Firm Performance

Using a unique sample, we attempt to identify the consequence of the separation between inside ownership and control for firm performance. We exploit the fact that banking institutions may hold their own shares in trust to construct a...

Governance and the Financial Crisis

Should boards of financial firms be blamed for the financial crisis' Using a large sample of data on nonfinancial and financial firms for the period 1996-2007, I document that the governance of financial firms is, on average, not...

One Share, One Vote: The Empirical Evidence

We survey the empirical literature on disproportional ownership, i.e. the use of mechanisms that separate voting rights from cash flow rights in corporations. Our focus is mostly on explicit mechanisms that allow some shareholders to...

The Role of Boards of Directors in Corporate Governance: A Conceptual Framework & Survey

This paper is a survey of the literature on boards of directors, with an emphasis on research done subsequent to the Hermalin and Weisbach (2003) survey. The two questions most asked about boards are what determines their makeup and...

Women on Boards: The Superheroes of Tomorrow?

Can female directors help save economies and the firms on whose boards they sit? Policy makers seem to think so. Numerous countries have implemented boardroom gender policies because of business case arguments. While women may be the...

Empowering the ECB to Supervise Banks: A Choice-Based Approach