The competition by states for incorporations has long been the subject of extensive
scholarship. This article tries to deconstruct the state competition debates by showing that scholars are engaged in three separate debates that are only loosely connected to each other. The first, ?directional?
debate concerns whether firms, if given a choice, will chose corporate law rules that maximize shareholder value or managerial benefits. Resolution of this question is relevant regardless of whether states ?compete.? All it takes to make this question important is for firms to have a meaningful choice among legal rules. The second, ?competition? debate concerns whether, how, and which states compete for incorporations. Depending on what is meant by ?competition?, competition can exist even in a regime where firms have no choice over where they incorporate and may not exist in a regime where firms have free choice. The third, ?federalism? debate concerns the shape a mandatory corporate law would take if such a law were enacted. Separating these three conceptually distinct questions, and the evidence relevant to each, yields a better understanding of the arguments made by the partisans in the state competition debate and of the issues that remain unresolved.
Banks are special, and so is the corporate governance of banks and other financial institutions as compared with the general corporate governance of non-banks. Empirical evidence, mostly gathered after the financial crisis, confirms this. Banks...Read more
The global financial crisis highlighted the interconnectedness of international financial markets and the risk of contagion it posed. The crisis also emphasized the importance of supranational regulation and regulatory cooperation to address that...Read more
This article argues that there is a fundamental mismatch between the nature of finance and current approaches to financial regulation. Today’s financial system is a dynamic and complex ecosystem. For these and other reasons, policy makers and...Read more
This paper provides a brief assessment of how ethics, culture and corporate governance have evolved in banking since the financial crisis. It concludes that we need to strengthen capital ratios and equity governance in banking to improve ethics...Read more